The EBRD, which invests in 38 emerging economies across three continents has launched an emergency package worth an Initial €1 billion to support companies in its countries suffering because of the crisis.
According to the Bank’s economists, the pandemic will have a negative impact on economies across the EBRD regions but recovery could be robust once the outbreak is contained. The final economic impact will depend on the duration of the pandemic, as well as policy response by national authorities and governments in key export markets.
„Containment efforts will lead to lower consumption of services, such as restaurants, recreation, and to some extent transportation. They will also negatively affect household consumption of goods. Moreover, households may postpone some consumption due to uncertainty created by the pandemic. As demand decreases, many firms, especially SMEs, may experience a sharp decrease in revenues, tightening their liquidity. Overleveraged firms will record higher liquidity constraints, increasing the risk of bankruptcy,” the bank says.
Indirect effects on EBRD economies include the disruption of global supply chains, weaker foreign demand, lower oil and commodity prices and wide regional declines in tourism and travel.
