Fitch Lowers Growth Forecast for the Moroccan Economy in 2025, Optimistic Outlook for 2026
Fitch Solutions has adjusted its growth forecast for the Moroccan economy in 2025 from 5.0% to 4.8%. Nevertheless, the agency highlights that this rate is the highest since 2021 and reflects a notable acceleration compared to the growth recorded in 2024, which was lowered from 3.3% to 3.2%.
The report suggests that the national economy will experience further recovery in 2026, with an anticipated growth rate of 5.5%, benefiting from a gradual improvement in agricultural production and a rebound in domestic demand.
The report indicated that data from the High Commission for Planning, released on March 31, 2025, showed that real GDP rose by 3.7% in the fourth quarter of 2024, which was below Fitch’s expectations due to weak performance in some non-agricultural sectors.
According to the same source, the agricultural sector had the worst performance, contracting by 4.9%, marking the fourth consecutive quarterly decline, attributed to ongoing drought conditions. The industrial production also faced a sharp slowdown, with growth dropping from 7.5% in the third quarter to 3.7% in the fourth quarter, impacted by a decrease in automotive production.
In contrast, the construction sector demonstrated strong performance with a rise of 7.0%, while public administration activity rebounded from 3.7% to 3.9%, driven by expansionary fiscal policies adopted by the government.
The same source expects growth to accelerate in the coming quarters, bolstered by strong domestic demand and an improved trade balance. The agency also noted that private consumption is expected to see significant growth, rising from 3.2% in 2024 to 4.1% in 2025, contributing 2.2 percentage points to overall growth, supported by rising real income and declining inflation.
The report stated that fixed investment would contribute 2.2 percentage points to growth, with a projected increase of 7.1% in 2025. Fitch attributed this dynamism to reduced borrowing costs, anticipating that Bank Al-Maghrib will lower the main interest rate to 2.00% by the end of next year, following gradual cuts of 25 basis points in March 2025 and 50 basis points throughout 2024.
The agency emphasized that the capacity utilization rate reached nearly record levels, which will encourage companies to enhance capital spending. It also forecasted that foreign direct investment flows would remain strong, after rising by 55.4% in 2024, particularly in the automotive, aviation, and renewable energy sectors.
In the context of expansionary fiscal policies, Fitch Solutions expects that government consumption will increase by 2.6% in 2025, adding 0.5 percentage points to growth, driven by significant growth in current expenditure (excluding debt interest), supported by mobilization of local resources and international financing, particularly a €500 million loan from the European Investment Bank, along with support from the International Monetary Fund under the resilience and sustainability programs.
Despite the expectations of a slight recovery, agricultural performance is anticipated to remain under pressure in 2025, continuing the trend of migration from rural areas to cities and exacerbating unemployment amid saturated urban labor markets. However, improvements in food production will reduce the need for imports, which will help alleviate pressure on the trade balance.
The report also predicted an improvement in net exports’ contribution, expected to add 0.1 percentage points to growth in 2025, after pulling 1.2 percentage points in 2024, benefiting from improved growth in Europe and rising demand for Moroccan exports of goods and services.
Economic growth in Morocco is expected to reach 5.5% in 2026, benefiting from improved agricultural production and ongoing preparations for hosting the 2030 World Cup, which will support investment in infrastructure and capital formation.
However, the agency warned of certain risks that could threaten these forecasts, particularly if agricultural contraction persists, which could raise unemployment rates and increase reliance on imports. Additionally, any potential economic slowdown in Europe could weaken demand for Moroccan exports, especially in the automotive and textile sectors.
