Morocco holds firm as its region falters: the EBRD unveils its latest figures

Morocco is expected to record the strongest growth among the six economies in the region monitored by the European Bank for Reconstruction and Development. In its new forecasts published in September, the EBRD projects Moroccan GDP growth of 4.8% in 2026, up from 4.4% in its June estimate.

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This 0.4-point revision puts the kingdom ahead of Egypt, forecast to grow by 4.6%, Jordan at 2.5% and Tunisia at 2.4%. Meanwhile, Iraq is expected to contract by 12% and Lebanon to enter a 5% recession, the EBRD says.

The main driver of Morocco’s performance is in the fields. After several years of drought, agricultural production rebounded sharply in the first half of the year. The sector’s value added grew by 18.4% year on year, helping offset weaker activity in industry and construction.

The Moroccan economy had already grown by 4.6% in the first quarter, following 5% over the same period in 2025. The EBRD now estimates that the agricultural recovery will allow the country to maintain strong growth throughout the year.

Tourism and remittances from Moroccans living abroad are also bolstering external balances. In the first half of the year, tourism revenues reached 64.9 billion dirhams, compared with 61.5 billion in remittances from Moroccans living abroad. These two sources of foreign currency offset some of the widening trade deficit and rising energy bill.

Iraq and Lebanon drag the entire region down

Across the southern and eastern Mediterranean, the contrast is stark. The EBRD forecasts a regional contraction of 0.7% in 2026, after still projecting a 0.6% decline in its previous estimate. The collapse in Iraqi oil exports and the resumption of hostilities in Lebanon are pulling the average down.

Iraq can export through alternative routes only an amount representing less than a quarter of its usual volumes. Its GDP is expected to fall by 12% this year. In Lebanon, the war has hit tourism, destroyed new infrastructure and pushed inflation back up to 20% in April.

Without Iraq, the region would continue to grow by 3.9% in 2026. The projected decline therefore does not affect all countries uniformly, but it shows the scale of the shock facing economies most exposed to conflict, trade disruptions and soaring energy prices.

Morocco, for its part, continues to have particularly low inflation. It averaged just 0.5% during the first six months of 2026, despite rising energy prices. International reserves stood at 54.3 billion dollars in August, equivalent to 5.3 months of imports.

Public finances are evolving more slowly. The budget deficit is expected to reach 3.4% of GDP in 2026, while debt is projected to fall slightly from 66.6% of GDP in 2025 to 65.8% this year. The international bond issue carried out in May also attracted more demand than the amount offered.

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The EBRD forecasts a slowdown in Moroccan growth to 3.9% in 2027, while keeping the kingdom among the region’s most dynamic economies. This estimate remains significantly higher than the 2.9% forecast by Bank Al-Maghrib, whose scenario is based in particular on a cereal harvest falling from 93 to 50 million quintals.