Morocco Leads Stronger-Than-Expected Economic Rebound in Southern & Eastern Mediterranean
September 27, 2025 – A surge in tourism is fueling a robust economic recovery across the Southern and Eastern Mediterranean (SEMED) region, with Morocco experiencing especially strong gains, according to a new report released today by the European Bank for Reconstruction and Progress (BERD). The Regional Economic Prospects report indicates the SEMED region - encompassing Morocco, Egypt, Iraq, Jordan, Lebanon and Tunisia – saw growth of 3.6% in early 2025, a critically important jump from 1.2% the previous year. The BERD projects continued growth of 3.7% for the current year, though anticipates a slight slowdown to 3.2% in 2026.
Morocco is at the forefront of this positive trend, benefiting from a dramatic increase in visitor numbers. The country welcomed 17.4 million tourists in 2024, a 20% increase, and that momentum continued into early 2025 with a further 16% rise. This influx of travelers has coincided with a drop in inflation to 1.2%.
Egypt is also driving regional recovery, with growth accelerating from 2.4% in July to 4.2% in March. The report highlights renewed strength in manufacturing and retail sectors, alongside an 82.7% increase in remittances from expatriate workers and renewed interest from foreign investors in the public debt market.
Tunisia has also shown improvement, with growth rising from 1.6% to 2.4%, supported by gains in agriculture, construction, and industry.
However,the recovery is uneven. Iraq’s GDP contracted by 2.3% due to oil production cuts, and Lebanon continues to struggle following a 7.5% decline last year. Jordan has experienced only modest economic progress.
Despite the positive outlook, the BERD cautions that regional tensions, increasing competition from Asian economies, and tight government budgets pose potential risks to sustained growth in the medium term. The report underscores the need for continued vigilance and strategic economic planning to solidify the gains made in the region.
