HIBAPRESS
The High Commission for Planning announced that the national economy recorded a growth of 5.5% during the second quarter of 2025, thus achieving its highest pace since the post-Covid recovery phase in 2021.
The commission explained, in its memorandum on the economic situation for the second quarter of 2025 and forecasts for the third and fourth quarters, that this performance was accompanied by a more moderate improvement in the labor market, with a 1.4% increase in paid employment, on an annual change basis, during the same period, compared to 3.4% in the first quarter. This is mainly attributed to the tendency of companies in the service and industrial sectors to adjust based on raising labor productivity rather than new employment, in a context characterized by rising wage costs, especially for users at the minimum wage. The recovery in growth was also associated with an increase in the need for financing. Despite the remarkable development of tax revenues, whether for indirect taxes or corporate tax, which reflects the expansion of the tax base thanks to the recovery of activity, expenditures, especially those related to employee wages, achieved significant momentum, reaching 10.8%, which contributed to increasing the need for financing for public administrations. Thus, and considering the exacerbation of the needs of companies related to investment projects, the overall need for financing the national economy increased, reaching minus 3.2% of the quarterly gross domestic product, compared to minus 2% in the previous quarter. According to the High Commission for Planning, the new growth cycle of the national economy has entered its sixth quarter, recording an increase in non-agricultural activity with an annual average of 4.8% in the quarter. This momentum, which made it possible to fully close the gap in activity resulting from the Covid-19 health crisis, allowed for an increase in the economic growth rate. The economic dynamic was strengthened to reach 5.5% in the second quarter of 2025, thanks to a recovery that has expanded to include the majority of activity branches. Manufacturing, extractive industries, construction, and accommodation witnessed significant development, securing nearly 40% of the overall economic growth. The acceleration of activity was particularly stimulated by the recovery of exports, which was stronger than expected (+8.5%), as well as by the improvement in the trend of domestic demand (+9.2%). Household confidence rose, encouraging an increase in their consumer spending by 5.1%, compared to +4.4% in the previous quarter. The recovery of investment was also confirmed, which has stabilized on an upward trajectory since mid-2023, as the financial context was generally favorable for equipment during the second quarter of 2025, in light of the easing of borrowing costs and the continued decline in the prices of imported industrial equipment goods. The continuous dynamic of domestic demand, during the same period, led to the development of the volume of imports of goods and services by 15.7%. The commission explained that the improvement in the terms of trade, resulting from the disparate developments in export and import prices and the rise in the exchange rate, contributed to curbing the weight of the external payments bill, which made it possible to mitigate its impact on the expansion of activity.
