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Doha – Morocco’s economy is projected to accelerate to 5.0% growth in 2025, up from 3.3% in 2024, despite headwinds from a weak agricultural sector, according to a report published by Fitch Solutions on February 26.
BMI, a Fitch Solutions company, has revised its previous forecast of 5.6% down to 5.0%, primarily due to “emerging signs that agricultural production will fall below historical averages.”
Nevertheless, the forecast remains “notably optimistic” and continues to exceed the Focus Economics consensus of 3.9%.
“We project strong growth in the non-agricultural sector driven by solid investment, supported by Bank Al Maghrib’s accommodative monetary policy and substantial FDI inflows, particularly in the autos, aerospace, and renewable energy sectors,” the report states.
Investment is expected to be a pivotal driver of growth, sustained by ongoing rate cuts and robust foreign direct investment inflows.
Bank Al Maghrib, Morocco’s central bank, will maintain an accommodative monetary policy with “an additional 25 basis point decline in the policy rate in 2025 after 50bps worth of cuts in 2024, bringing the policy rate to 2.25% by the end of year.”
This monetary policy is expected to stimulate private investment by lowering borrowing costs, with bank lending rates at their lowest since Q1 2023, averaging 5.1% in Q4 2024.
The report specifies that Morocco’s strategic location, favorable operating environment, and infrastructure investments for the 2030 World Cup (co-hosted with Spain and Portugal) will continue to drive substantial foreign capital inflow, with net FDI having increased by 55.4% year-on-year in 2024.
Household spending, tourism, trade
Private consumption is forecasted to remain relatively robust in 2025 due to three main factors.
First, the government’s expansionary fiscal policy, which includes an 11.5% increase in expenditures on personnel and public-sector wages, will enhance household consumption. Second, low inflation, averaging 1.6% in 2025, will help maintain consumer purchasing power. Third, remittances growth is expected to remain steady given stronger growth in Europe, home to more than 80% of Moroccans living abroad.
However, these positive factors will be constrained by sluggish growth in the agricultural sector, which employs almost 30% of the labor force.
This is likely to keep the unemployment rate around its current level of 13.3%, limiting further gains in household income and purchasing power.
The contribution of net exports to growth is anticipated to be near zero in 2025. While accelerating growth in Europe (from 1.3% in 2024 to 1.5% in 2025) and continued strong performance of the tourism sector will boost demand for Moroccan exports, this will be offset by rising agricultural imports and contained growth in agricultural exports.
“The tourism sector, supported by the hosting of the African Cup of Nations in December 2025 and stronger growth in Europe, the main geographical source of Morocco’s tourists, will see the number of tourist arrivals rise from an estimated 16.8 million in 2024 to 17.8 million in 2025,” the report notes.
The report also addresses potential risks, stating, “While we remain bullish on Morocco’s economic prospects, risks are predominantly on the downside.”
These include an even weaker-than-expected agricultural season, which could impede growth by maintaining elevated unemployment rates and increasing import needs further.
Geopolitical tensions, particularly between Israel and Iran, could drive up oil prices and exert inflationary pressures.
Additionally, lower-than-expected growth in Europe resulting from US trade policies would reduce demand for Moroccan goods and services, especially automotive and textile exports.
Regarding US trade policies, the report mentions that if the US administration expands the list of strategic goods subject to tariffs to target imports of semiconductors, the impact on Morocco would be limited since “Morocco’s semiconductors exports to the US are about 0.5% of its total nominal exports and equivalent to 0.2% of GDP.”
Despite these challenges, the overall outlook for Morocco’s economy in 2025 remains positive, with growth expected to accelerate significantly from 2024 levels, driven primarily by the non-agricultural sectors of the economy.
