EBRD warns of lower growth and windfall to Russia from Iran war

LONDON, March 26 (Reuters) - Growth forecasts for certain developing markets ​are ⁠likely to be revised down by ​as much as 0.4 percentage points in the next regional economic outlook in June if energy prices remain ​elevated, ‌the European Bank for Reconstruction and Development said on Thursday. Oil prices have surged since the U.S. ⁠and Israel launched strikes on Iran, which retaliated by ⁠effectively closing the key Strait of Hormuz.

* ​Last month, the bank said it expected 3.6% growth this year and 3.7% in 2027 in the roughly 40 countries it covers.

* The bank said the economic impact will ​depend ‌on the duration of the war in the Middle East and the extent of energy infrastructure damage.

* "The direct negative effects on GDP growth via energy costs, the price of fertilisers and food staples, disruptions to supply chains, tourism and remittances from the GCC (Gulf Cooperation Council) ​will be compounded by higher inflation, greater pressures on government budgets and tighter financing conditions in ‌response to rising inflation," it added.

* A sustained oil price above $100 per barrel and disrupted supply chains could increase global ‌inflation by more than 1.5 percentage points, the bank said.

* Lebanon, Jordan, Iraq, Egypt, Ukraine, Mongolia, Senegal, Tunisia, Moldova, Kenya, Turkey and North Macedonia are the most impacted economies in the ​EBRD regions, when taking into account myriad factors from energy and food to fiscal capacity to cushion the ‌shock.

* Egypt, Morocco and Senegal also have both large energy trade deficits and economies with high oil intensity, the bank said.

* In Azerbaijan, Iraq, Kazakhstan, Mongolia and Nigeria, oil and gas ⁠trade ⁠surpluses range from 11% to 39% of GDP, but ‌the bank noted that production has been reduced or halted at Iraq's largest oil fields.

* For every $10 per barrel ​increase in the ​oil price, Russia gets a "windfall in revenue" from oil, gas and ‌fertiliser sales equivalent to 1.5 percentage points of 2025 GDP, the EBRD estimated.

* Oil prices could reach $180 per barrel if Gulf oil supplies remain restricted due to short-term inelastic demand, the bank said. (Reporting by Libby George; Editing by Nia Williams)