London, March 26 (QNA) – The European Bank for Reconstruction and Development (EBRD) announced Thursday that it is likely to cut its growth forecasts for some emerging markets by as much as 0.4 percentage points in its next economic report due in June if energy prices remain at high levels.

Oil prices have surged since the US ⁠and Israel launched strikes on Iran, which retaliated by ⁠effectively closing the key Strait of Hormuz.

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.

 The direct negative effects on GDP growth via energy costs, the price of fertilizers 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, it added.

 ​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. (QNA)