EBRD downgrades regional growth forecasts as war continues in Ukraine: The European Bank for Reconstruction and Development (EBRD) downgraded its growth forecast for the nations in which the lender operates in its latest Regional Economic Prospects report (pdf). The EBRD now sees overall growth across its seven regions slowing to 1.1% in 2022 from 6.7% last year — a downwards revision of 0.6 percentage points since its last forecast in March. Growth is set to be hampered by high inflation, which approached a 14-year high of 11.9% across the regions in March.

A tricky spot for the region: Regional governments’ finances “have been depleted after they have injected a lot of liquidity into the covid recovery and are now struggling to do the same to moderate food price inflation,” EBRD SEMED chief Heike Harmgart said.

The EBRD is still forecasting the Egyptian economy to grow at a 3.1% clip this year, having in March revised down its projection from the 5.0% it penciled in last November on the back of rising food and energy prices. The economy should rebound to register 6.0% growth in 2023. Growth in the wider Southern and Eastern Mediterranean (SEMED) region is also still projected to register 2.5% during 2022.

Concerns about global growth are mounting: The report comes amid growing concerns about the direction of the global economy as the war in Ukraine and rising interest rates threaten to push some of the world’s biggest economies into recession. The IMF is now expecting a “significant slowdown” in global growth this year due to the conflict and signs are increasing that the eurozone, the US and China could soon fall into recession.

The report launched at a panel discussion during the EBRD’s annual meeting and business forum in Marrakech, which will wrap up on Thursday (watch, runtime: 1:08:59).

The foreign press took note: Reuters and Bloomberg picked up the report.

EBRD ON FOOD SECURITY, GREEN HYDROGEN

The EBRD is in negotiations with Egypt, Morocco and Tunisia to help raise their food storage capacities and expand food suppliers, the lender’s Southern and Eastern Mediterranean Managing Director Heike Hargmart told Reuters during the bank’s meetings. “We are in early discussions on what is needed on capital investment to boost storage facilities,” she said.

Plans to improve regional food security: The EBRD is also partnering with the World Bank to help Egypt, Lebanon and Jordan improve regional food security, she added, without disclosing further entails. It is also in discussions with financial institutions in Egypt and Morocco to uease trade financing amid increasing food demand, she said.

EBRD sees green hydrogen potential in Egypt: Egypt and Morocco are the two SEMED countries with the best potential to produce green hydrogen, Harmgart said at an Egypt-specific panel event in Marrakech yesterday, adding that the EBRD is keen to continue funding local hydrogen projects (watch, runtime: 1:04:36). International Cooperation Minister Rania Mashat, SCZone chairman Yehia Zaki, and Scatec CEO Terje Pilskog joined Harmgart on the panel to discuss the future of green hydrogen and renewable energy in Egypt. Scatec is a key player in the consortium set to build a 100 MW green hydrogen plant in Ain Sokhna, one of the landmark projects approved ahead of the COP27 climate summit in November.