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Decline in Inflation and Agricultural Recovery Boost Economic Growth Prospects in Morocco
The economic outlook for Morocco is trending towards stronger growth in 2026, driven by a decrease in inflationary pressures and a recovery in the agricultural sector, along with the continued positive momentum in non-agricultural activities. The High Commission for Planning forecasts a growth rate of 5 percent in 2026, compared to 4.7 percent in 2025, according to the projected economic budget data.
These expectations are based on consistent macroeconomic assumptions, primarily the achievement of an above-average agricultural season for 2025-2026, improved external demand directed towards Morocco, as well as a continued downward trend in international prices for certain raw materials, with the acknowledgment that these prospects remain contingent on developments in the global context and climatic risks.
On the international front, global economic growth is expected to be modest at around 2.9 percent in 2026, amid rising geopolitical tensions and weakened global trade dynamics, according to estimates from international institutions, with falling energy and raw material prices contributing to the curbing of inflation worldwide.
In this context, domestic demand continues to play a key role in driving national economic growth, supported by increased household consumption and investment dynamics, particularly due to major projects, the activation of the new investment charter, and preparations for international events. Domestic demand growth is expected to reach approximately 5.7 percent in 2026, contributing over six points to overall growth.
Sectorally, the projected economic budget anticipates a strong increase in the value added of the agricultural sector of nearly 10.4 percent in 2026, benefiting from improved rainfall, a recovery in livestock farming, and herd restructuring programs. Non-agricultural activities are also expected to maintain stable growth rates, supported by improvements in manufacturing, construction, public works, and services, especially tourism and transport.
Regarding public finances, regular revenues continue their upward trend thanks to tax reforms implemented since 2021, which will enable, alongside a reduction in subsidy expenses and an increase in nominal gross domestic product, a decrease in the budget deficit and a continued downward trajectory in public debt that commenced in 2023.
Conversely, forecasts indicate a worsening trade deficit due to a significant rise in imports related to investment and domestic demand, despite improvements in agricultural and phosphate exports as well as service exports. The current account deficit is expected to stabilize around 1.9 percent of gross domestic product in 2026, supported by remittances from Moroccans abroad and tourism revenues.
Improvement in Purchasing Power
Household purchasing power is anticipated to gradually improve throughout 2026, bolstered by declining inflation and better disposable income, especially in rural areas, due to the expected recovery in the agricultural sector. This improvement is likely to have a positive impact on household consumption, which will remain one of the key drivers of economic growth.
This development can be attributed to a decline in the prices of certain raw materials globally and stable supply chains, along with the positive effects of reduced subsidy costs, as well as improvements in real wages, particularly in agriculture and services-related sectors. The ongoing activation of direct social support programs is also expected to enhance the income of vulnerable and middle-income groups and mitigate the erosion of their purchasing power.
In this framework, final consumption by households is projected to grow by approximately 4.1 percent in 2026, supported by rising incomes, moderate prices, and continued government measures aimed at supporting social stability, with the caution that this improvement remains contingent on climate conditions, international price stability, and the national economy’s ability to create sustainable job opportunities.
The projected economic budget indicates that the decline in the budget deficit and the improvement in nominal gross domestic product will contribute to a reduction in the public debt ratio over the forecast horizon. Total treasury debt is expected to decrease to about 66.1 percent of gross domestic product in 2026, down from 67.4 percent in 2025, with a decline in the share of domestic debt.
Conversely, the external debt of the treasury is expected to continue its upward trend, while total public debt is projected to decrease slightly, stabilizing around 77.5 percent in 2026.
On the monetary front, the good performance of domestic demand, supported by favorable financing conditions, is expected to accelerate the pace of bank lending, particularly mortgage and equipment loans, alongside an increase in the money supply and foreign currency reserves covering more than five months of imports.
