Morocco is set to outperform most countries in the Middle East and North Africa in 2025, with a projected economic growth of 4.2%, according to a new report by Ernst & Young (EY).
That puts Morocco ahead of regional peers like Egypt, Qatar, and Oman, and just behind Gulf giants like Saudi Arabia (4.3%) and the UAE (4.8%).
The EY report points to several reasons behind Morocco’s momentum, “Strong consumer demand and sustained investment from both public and private sectors remain key drivers.”
The report noted that “additional support came from improved rainfall during the winter months and lower global energy prices, both of which helped ease cost pressures and bolster consumption.”
While Morocco pushes forward, global growth is expected to cool off. Worldwide GDP growth is projected to dip to 3.0% in 2025 and 2.9% in 2026, down from 3.2% this year.
The slowdown is due to rising trade tensions, persistent geopolitical instability, and volatile supply chains.
EY forecasts tha the MENA region will grow by 3.6% in 2025, almost double its estimated 1.9% rate for 2024. The rebound is being driven by a rise in oil output, renewed investor confidence, and improving demand across the region.
Still, threats loom. The report flags military tensions involving Iran, Israel, and the U.S. as a major risk.
A serious disruption in the Strait of Hormuz, one of the world’s key oil routes, could trigger a spike in inflation and weigh down trade, tourism, and foreign investment.
On inflation, the MENA region is expected to see a significant drop from 6.4% in 2024 to 4.3% next year.
Egypt is set to see the steepest decline, going from 28.2% to 13.6%. Gulf states, however, may face a slight uptick, with inflation creeping up from 1.7% to 2.1%.
Oil production is also on the rise. As of June, eight OPEC+ countries, including Algeria, Saudi Arabia, and the UAE, collectively added over one million barrels per day across three months.
This supply increase comes even as energy markets remain shaky due to geopolitical risks.
Despite falling inflation, tight monetary policies are expected to remain in place across the region. Egypt has started easing interest rates cautiously after a tough tightening cycle in 2024. In the Gulf, borrowing costs will likely stay aligned with U.S. rates due to currency ties with the dollar.
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