EBRD Lowered 2026 Growth Forecast for SEMED Region
Regional tensions and energy export disruptions have hampered economic performance across the SEMED nations.
Updated on Sept. 24, 2026 in Economic Indicators
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The European Bank for Reconstruction and Development has reduced its 2026 economic growth forecast for the SEMED region to -0.7 percent. This outlook follows significant regional instability that hindered trade and increased energy costs.
Why it matters
Heightened tensions and disruptions to oil exports through the Strait of Hormuz have created a challenging environment for regional economies. While specific nations like Egypt maintain resilience, these macro pressures continue to weigh on the broader economic landscape.
The SEMED region faces a projected 2026 growth of -0.7 percent, while Iraq is expected to experience a 12.0 percent economic contraction. Tunisia reported a 31.6 percent increase in its energy import bill between January and July 2026.
The players
European Bank for Reconstruction and Development
This international financial institution was founded in 1991 to support the development of market economies across various regions.
International Monetary Fund
This global organization works to foster monetary cooperation and secure financial stability for its member nations.
The details
Regional economic performance is starkly divided, as Iraq struggles with severe oil export limitations due to Strait of Hormuz disruptions, while Egypt demonstrates resilience following the completion of its seventh IMF review. Conversely, Lebanon and Jordan have grappled with inflationary pressures throughout 2026, though Morocco has seen a significant boost in agricultural output.
Timeline
January-July 2026: Tunisia saw its energy import bill rise by 31.6 percent.
April 2026: Lebanon experienced year-on-year inflation that reached 20 percent.
May 2026: Inflation in Jordan reached a peak of 2.8 percent.
July 2026: Egypt finalized the seventh review of its IMF-supported program.
2027: Analysts project a regional rebound to 7.1 percent economic growth.
Macro View
This regional forecast follows the framework of the IMF-supported programme for Egypt, which serves as a benchmark for gauging economic stability in the area. These projections reflect a departure from historical growth patterns, highlighting how current trade disruptions contrast with previous expansion cycles.
The economic downturn in the SEMED region may lead to increased cost-of-living pressures for residents as energy import costs remain elevated. These trends could influence future regional employment opportunities and inflation rates, directly impacting household budgets.
The takeaway
Regional instability remains a primary driver of economic volatility across the SEMED nations. Investors and stakeholders should monitor trade route developments, as they continue to significantly influence regional growth projections.
Further reading
For more on global market shifts, visit the Economic Indicators section.
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