Morocco’s Economic Outlook: Navigating Challenges, Embracing Growth
Despite facing economic and climatic headwinds, Morocco’s economy is poised for accelerated growth in the coming years, according to the Organisation for Economic Co-operation and Development (OECD). The OECD’s latest quarterly report paints a picture of resilience and potential, projecting a GDP growth rate of 4.1% in 2025 and 3.8% in 2026. This positive outlook comes even as the country grapples with challenges like drought and global economic uncertainties.
Several factors are contributing to this projected upswing. A resurgence in private consumption, fueled by rising real incomes, is expected to play a significant role. Increased foreign direct investment (FDI), a booming tourism sector, and the contribution of the New Investment Charter are also anticipated to bolster industrial production and export growth. Morocco’s tourism sector, in particular, continues to flourish, attracting record numbers of visitors and contributing significantly to the economy. This aligns with global trends, as the World Tourism Organization (UNWTO) highlights the resilience of the tourism sector, with international tourist arrivals reaching nearly 90% of pre-pandemic levels in the first half of 2023 (Source: UNWTO).
While inflation has significantly slowed to below 2% in 2024, the OECD report anticipates a slight uptick after April 2025 due to the gradual reduction of butane gas subsidies. This delicate balancing act between supporting citizens and managing fiscal pressures is a common theme in many economies grappling with global energy price fluctuations.
A closer look at Morocco’s economic performance reveals a mixed picture. The industrial sector has experienced substantial growth, driven by strong foreign demand for key products like automobiles and aircraft parts. This reflects Morocco’s increasing integration into global value chains, particularly in the automotive industry. However, the agricultural sector has contracted by over 4% due to consecutive years of drought and limited rainfall. This has negatively impacted incomes and employment opportunities in rural areas, highlighting the vulnerability of the agricultural sector to climate change. Addressing this challenge requires sustainable water management practices and investments in drought-resistant crops.
On the trade and investment front, exports grew by 5% in the first nine months of 2024, supported by increased industrial output and the expanding tourism sector. FDI inflows surged by over 50% compared to the previous year, likely attracted by new government investment incentives and the development of a sophisticated investment ecosystem, particularly in industries like electric vehicle battery production. This focus on attracting investment in green technologies aligns with global efforts to transition to a more sustainable future.
The OECD emphasizes the importance of Morocco continuing to implement structural reforms to further enhance economic growth. These include gradually reducing government subsidies to certain sectors, promoting greater female participation in the labor market, and addressing demographic challenges through improved education and vocational training. Investing in human capital is crucial for long
