EBRD`s Mirow says inflation could curb growth in eastern Europe
`We must realise that inflation has the potential to destroy..."
European Bank for Reconstruction and Development president Thomas Mirow said rising inflation could curb the rapid economic growth of a number of countries in central and eastern Europe, according to Thompson Financial.
`We must realise that inflation has the potential to destroy part of the progress that has been made in many of these societies - inflation which is double-digit or which is even above 20 per cent,` he said in an interview with the Financial Times.
Mirow took up the job of EBRD president at the beginning of the month.
The inflation outlook has deteriorated sharply in the region`s energy-importing countries, especially in the Baltic states, south-east Europe and Ukraine, where last month`s annual inflation rate hit 31 percent.
Mirow said that with the credit crunch affecting global markets, the EBRD has a big role to play in supplying funds to borrowers.
Private investors remain interested in eastern Europe and some would switch activities to the region from countries where they might have had difficulties, he said.
`But one senses that the financial institutions have got much more cautious with their liquidity,` he said.