BAKU, Azerbaijan, September 27. The southern and eastern Mediterranean (SEMED) region recorded stronger-than-expected growth in the first half of 2025, averaging 3.6 percent compared with 1.2 percent in 2024, according to the European Bank for Reconstruction and Development’s (EBRD) latest outlook, Trend reports.
As such, growth is now projected at 3.7 percent for 2025 as a whole, before easing to 3.2 percent in 2026.
The report, entitled Under pressure, highlights a recovery in tourism, higher remittance inflows, and improved external balances as key drivers of the region’s performance. Inflation has moderated in Egypt, Tunisia, and Morocco as food prices declined.
In Egypt, growth accelerated to 4.2 percent by March 2025, supported by manufacturing and trade, while reserves rose to a 20-year high. Morocco’s economy expanded by 4.7 percent in the first half of 2025, buoyed by strong exports and tourism. Tunisia saw growth reach 2.4 percent, helped by agriculture and manufacturing, while inflation eased. Jordan and Lebanon posted more modest recoveries, while Iraq returned to positive growth, driven by increased oil production.
Across all EBRD regions, growth is expected to average 3.1 percent in 2025 and 3.3 percent in 2026, though the Bank cautioned that persistent geopolitical tensions, fiscal pressures, and global competition continue to weigh on the outlook.