Morocco Leads Economic Growth in Southern and Eastern Mediterranean in 2025

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Morocco Leads Economic Growth in Southern and Eastern Mediterranean in 2025

Strong Economic Growth in Morocco

Morocco has demonstrated impressive economic growth in the first half of 2025, with a rate of 4.7%. This makes it the highest among Southern and Eastern Mediterranean (SEMED) countries covered by the European Bank for Reconstruction and Development (EBRD) outlook report. The EBRD's analysis highlights a positive trend in the region, with Morocco leading the way in terms of growth.

The report indicates that Morocco's economic growth has been on an upward trajectory. It accelerated from 3.7% in 2023 to 3.8% in 2024 year-on-year. This consistent improvement is notable when compared to other countries in the SEMED region. For instance, Egypt recorded a growth rate of 4.2%, Jordan at 2.7%, Lebanon at 1.9%, and Tunisia at 2.4%.

Inflation trends also reflect Morocco's economic stability. Annual inflation in the country fell to an average of 1.2% between January and July 2025. This decrease is primarily attributed to lower prices for food, fuel, and transportation. In contrast, Egypt experienced an average inflation rate of 15.7%, while Jordan and Tunisia saw rates of 1.9% and 5.6%, respectively.

Fiscal Performance and Government Plans

Morocco's fiscal deficit showed significant improvement in 2024, dropping to 3.9% of GDP. This was 0.4 percentage points below the budget target, largely due to higher tax revenues. The government has set ambitious targets for further reduction, aiming to bring the fiscal deficit down to 3.5% of GDP in 2025 and 3.0% in 2026.

Exports of goods increased by 5.8% in 2024, driven by strong performance in phosphate and automotive sectors. Additionally, tourist arrivals surged by 20% to reach 17.4 million. From January to July 2025, tourist numbers rose another 16% year-on-year, indicating a robust recovery in the tourism sector.

Economic Resilience and Foreign Exchange Reserves

Official reserves in Morocco reached $45 billion in August 2025, representing a 12% increase year-on-year. These reserves are sufficient to cover more than five months of imports, showcasing the country's financial resilience.

The EBRD projects that Morocco's growth will continue to be strong, averaging 4.2% in 2025 and 4.0% in 2026. This growth is expected to be supported by public investment. However, the outlook for other countries in the region is less optimistic. For example, Tunisia's growth is projected to reach only 2.1% in 2026.

Potential Risks and Challenges

Despite the positive outlook, the report identifies several risks that could impact the region's economic performance. A potential slowdown in European markets could lead to reduced remittances and export demand. Additionally, adverse weather shocks pose a risk to agricultural and other sectors, which could affect overall economic growth.

Conclusion

Morocco's economic performance in 2025 reflects a combination of strong growth, stable inflation, and improved fiscal management. With continued investment and favorable conditions, the country is well-positioned to maintain its momentum. However, vigilance is required to address potential challenges and ensure sustained economic development.

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