The southern and eastern Mediterranean region did way better than expected in early 2025, with economies growing 3.6% compared to just 1.2% last year, according to the European Bank for Reconstruction and Development (EBRD)‘s latest Regional Economic Prospects report. The European Bank for Reconstruction and Development now thinks the SEMED region will grow 3.7% this year before slowing to 3.2% in 2026. Tourism came roaring back. More money flowed in from workers abroad. Trade got better. Inflation cooled off in Egypt, Tunisia, and Morocco as food prices stopped climbing so fast. The report, called “Under pressure,” shows these countries doing well even as other economies struggle.
The SEMED region covers Egypt, Iraq, Jordan, Lebanon, Morocco, and Tunisia – places that have dealt with years of economic mess from political chaos, debt problems, and COVID killing tourism. Many depend on cash sent home from people working in Gulf countries and Europe, plus tourist money that vanished during lockdowns.
Egypt led the pack with growth jumping from 2.4% last July to 4.2% by March. Manufacturing came back to life and retail trade did great. Money sent home from Egyptian workers shot up 82.7% while foreign investors started buying government debt again. Morocco saw tourists flood back – 20% more in 2024 to hit 17.4 million visitors, then another 16% jump early this year. Inflation there fell to just 1.2%. Tunisia’s growth picked up from 1.6% to 2.4%, helped by farming, construction, and factories making stuff.
Not everyone did well though. Iraq’s economy shrank 2.3% last year because of oil production cuts. Lebanon is still crawling back from a brutal 7.5% drop. Jordan grew but only modestly. The EBRD warns that regional wars, Chinese competition, and tight government budgets could slow things down.
