OECD Economic Outlook, Volume 2026 Issue 1

Morocco

GDP growth is projected to increase by 5.0% in 2026 and 3.9% in 2027, after 4.6% in 2025. Exceptional rainfall in the winter is expected to boost agricultural output while public investment in major infrastructure projects will continue to support growth in 2026. The energy price shock is set to temporarily increase inflation and the current account deficit in 2026, but private consumption is projected to remain robust. A prolonged conflict would hamper Morocco’s exports and create supply disruptions for the domestic fertiliser industry.

The fiscal deficit is expected to continue narrowing despite the sustained increase in public expenditure, owing to increasing tax revenues following recent tax reforms. Given the expected rebound in inflation, the Central Bank is set to stop its easing cycle and keep its policy rate unchanged over 2026-27. Decisive policies are needed to support strong and inclusive growth by expanding social protection, tackling informality and corruption, and enhancing market competition. Reducing Morocco’s reliance on energy imports would also be key to improve energy security.

GDP growth is robust

GDP grew by 4.6% in 2025, as private consumption and investment were supported by declining inflation, improving consumer confidence and large public infrastructure projects. Inflation declined continuously over 2025, driven by decreasing food prices but increased to 1.7% in April 2026 due to energy prices. Business confidence, exports and tourism receipts were rising in early 2026, just before the energy price shock. Unemployment declined marginally from 13.4% in 2024 to 13.0% in 2025 but remains high, especially for young people (37.2%) and women (20.5%).

Morocco

1. Core inflation excludes volatile items (mainly fresh food and energy prices) as well as administratively regulated prices.

Source: Haut commissariat au Plan (HCP); and Bank Al-Maghrib.

Statlink

Morocco: Demand, output and prices

Statlink

The current account deficit exceeded 2% of GDP in 2025 before the energy shock started. As it imports 90% of its energy needs, Morocco is vulnerable to such shocks. Rising prices of phosphate-based fertilisers, which accounted for 21% of Morocco’s 2025 export revenues, partially offset this exposure. More generally, Morocco is closely dependent on economic activity in the European Union, representing 60% of its goods exports, while direct exposure to the United States is limited, representing 3% of goods exports.

The monetary policy rate is expected to be kept on hold and the fiscal deficit to narrow

The central bank has kept the policy rate unchanged since March 2025 at 2.25%. Given the expected temporary rebound in inflation due to the energy shock, no further cut is anticipated over 2026-27. The fiscal deficit decreased marginally from 3.9% in 2024 to 3.5% of GDP in 2025 and is set to stabilise at 3.0% in 2026-27. While public investment and consumption will continue increasing, driven by infrastructure projects and the extension of social protection, that is expected to be offset by higher fiscal revenues, driven by increasing economic activity and recent tax reforms, which progressively enlarge the tax basis and bolster enforcement. In response to the energy shock, the government reactivated the support measures to the transport sector that were in place in 2022-23 but did not add any direct support to households. Both an extended energy price shock and the on-going extension of social protection may lead to higher-than-expected fiscal spending.

Growth is projected to remain strong in 2026 and 2027

Economic activity is expected to grow by 5.0% in 2026 and 3.9% in 2027. Inflation is projected to increase from 0.7% in 2025 to 3.2% in 2026 due to rising food and energy prices and then to fall back to 1.4% in 2027. Abundant rain during the winter has refilled water reservoirs, supporting a rebound in agricultural output of around 15% in 2026 before a normalisation in 2027. Consumption growth is projected to moderate slightly as inflation increases, but will remain robust. Infrastructure investment will continue to underpin expansion in the manufacturing and construction sectors. Export performance is projected to continue improving over 2026–27 but the current account deficit is expected to widen to 3.1% of GDP in 2026 and 3.3% in 2027 due to rising import prices. The unemployment rate is projected to decrease slightly in 2026 (by 0.3 percentage points) and stabilise in 2027. A further reduction in global trade due to escalating geopolitical tensions would hamper Morocco’s exports and GDP growth. In the short-term, Morocco may gain from a reallocation of the global demand for fertilisers, as the blockade of the Hormuz strait prevents other major producers in the Middle East from exporting, but a prolonged conflict may also create supply disruptions for the domestic fertiliser industry due the reliance on imports of ammonia and sulphur from the Gulf economies.

Strengthening human capital and productivity would support inclusive growth

Reducing informality and strengthening human capital and productivity are key priorities for Morocco. Increasing the flexibility of labour contracts and incentives to work in the formal sector while improving tax enforcement would help to tackle informality. Expanding access to childcare, tackling gender stereotypes and reinforcing work-based vocational training would support the integration of women and youth in the labour market. Productivity would be lifted by upskilling the workforce and enhancing competition. The anti-corruption framework has been strengthened, but further efforts are needed as perceived corruption, especially in public procurement, remains high. Climate transition is another priority. Gradually raising water prices, reinforcing climate policies, and reducing reliance on energy imports would improve resilience and energy security.