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Central Europe · EBRD · Economic Outlook · War-Risk Premium
The European Bank for Reconstruction and Development (EBRD) has expressed cautious optimism for the year ahead in its investment regions, citing a decline in the war-risk premium demanded by investors for central and eastern European countries.
This premium has fallen back to pre-invasion levels, mitigating the economic impact of the conflict. The EBRD has raised its 2026 growth forecast for the region to 3.6% and expects 3.7% in 2027, driven by increased defense and infrastructure spending, strong demand for AI-related equipment from countries like Hungary and Poland, and prospects for stronger growth in Germany.
However, the bank notes that the speed of Germany's spending and potential U.S. tariffs remain constraints. The EBRD also lowered its growth forecast for Ukraine to 2.5% due to ongoing war impacts.
