Growth in North Africa is estimated to have declined by 1.1 percentage points to 4.3 percent, from 5.4 percent in 2021. This decline mainly reflects the sharp contraction in Libya and the effects of the drought in Morocco. Growth in the region is projected to stabilize at 4.3 percent in 2023 supported by the expected strong recovery in Libya and Morocco, countering the projected slowdown in Algeria and Egypt. However, the region’s economies remain subject to significant headwinds, notably the fluidity in Libya’s political situation and climate shocks, which could impact growth in 2024, as seen by the projected decline of 3.4 percent in real GDP.

In contrast, Egypt’s growth almost doubled from 3.3 percent in 2021 to 6.1 percent in 2022, boosted by expanded infrastructure investments, higher gas production, and increased vessel traffic through the Suez Canal.

Similarly, Mauritania’s growth more than doubled from 2.4 percent in 2021 to 5.3 percent in 2022, supported by a rebound in household consumption, greater production of iron ore and gold, and increased investment in natural gas and renewable energies.

North African countries exporting oil and gas, such as Algeria and Libya, could be alternative sources for the European Union’s oil and gas needs, if the bloc’s plans to diversify away from dependence on imports from Russia materialize.