EBRD predicts slower economic growth in southern and eastern Mediterranean
In the first half of FY 2021-22, year-on-year growth in Egypt averaged 9% driven by improvements in tourism, manufacturing, construction, wholesale and retail trade and farming. The EBRD expects this to continue as “rising demand and prices for Egyptian gas exports could support medium-term growth, while the IMF-supported program should help implement the reforms and investor confidence”. However, the report highlights rising wheat, food and oil prices due to the conflict in Ukraine. The 2021-2022 financial year should nevertheless end with growth of 5.7%.
Jordan is expected to end 2022 with 1.9% growth. “The implications of the war in Ukraine are weighing on tourism and trade flows. Rising commodity prices are holding back private consumption,” the EBRD said.
Lebanon, on the other hand, with its contraction of 10% of GDP in 2021, could see a growth of 1% in 2022 after having reached its low point and thanks to the legislative elections at the end of May 2022. By evacuating the political impasse, which lasted a decade with an economic crisis as a corollary, they will lead to the adoption of essential reforms for the country. But also mandatory to obtain the disbursement of the aid program supported by the International Monetary Fund (IMF).
The bank is more optimistic for 2023 with growth of 4.8% in the Semed region. “Economic and governance reforms in all countries are progressing and giving a boost to the acceleration of the recovery,” he said.
However, this figure is misleading. It is inflated by the good prospects for Egypt and the 5% increase expected in 2022-2023. In the other countries studied, an increase is also expected with 3% in Morocco and Lebanon (which starts from afar), and 2.5% in Jordan and Tunisia.