Iran conflict a risk to economic growth: EBRD president

ISTANBUL/LONDON: The widening US-Iran war is a risk to economic growth, the president of the European Bank for Reconstruction and Development told Reuters on Thursday, but said the fallout depends on how long the conflict lasts.

EBRD President Odile Renaud-Basso told Reuters in an interview in Istanbul that the conflict “can reduce risk capital” for the region - but that apart from Lebanon, the fallout thus far was contained.

“For the time being, it’s limited,” she said, adding that “the risk is on the downside.”

Last week, the EBRD pegged growth for the 41 countries it covers at 3.6% for this year and 3.7% in 2027, boosted by spending on big infrastructure projects in Europe, but offset by US tariff and trade uncertainty. The war has effectively closed the Strait of Hormuz, a key shipping artery, sending crude prices up some 12% - and sounding an alarm for many of the energy-importing countries in which the EBRD works.