Doha – Morocco’s economy is projected to grow at 3.6% in 2025, up from 3.2% in 2024, according to the World Bank’s latest economic update titled “Prioritizing reforms to boost the business environment.”
The report indicated that despite drought conditions affecting agricultural output in 2024, non-agricultural growth increased to 3.8%, driven by industrial sector revival and gross capital formation rebound.
Inflation has dropped below 1%, enabling Bank Al-Maghrib to ease monetary policy.
“Morocco’s economic outlook remains robust, characterized by controlled inflation, a strong external position, a steady path towards fiscal consolidation, and a stable debt-to-GDP ratio,” said Ahmadou Moustapha Ndiaye, Division Director for the Maghreb and Malta at the World Bank.
The agricultural sector is expected to show improvement in 2025, with agricultural GDP projected to expand by 4.5%.
Non-agricultural growth is anticipated to decrease to 3.5% due to base effects, as sectors that demonstrated strong growth in 2024 will continue to grow robustly but at a slightly lower rate than the year before.
Recent rainfall has contributed to more favorable conditions for the agricultural sector, with agricultural GDP expected to stabilize at around 2.6% growth in the medium term, according to Javier Diaz Cassou, Senior Principal Economist at the World Bank in Morocco.
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The country’s external position remains stable, with a moderate current account deficit supported by increasing foreign direct investment inflows.
The debt-to-GDP ratio continues its gradual decline, expected to settle between 67% and 68% over the projection period. The budget deficit is following a trend of progressive reduction toward pre-pandemic levels.
The labor market presents ongoing challenges. While urban areas created approximately 162,000 jobs in 2024, employment growth has not kept pace with demographic changes.
Over the past decade, the working-age population increased by more than 10%, while employment grew by only 1.5%. This gap stems from lingering post-pandemic shock impacts, delayed reform effects, and low women’s participation in the labor market.
The global lender’s analysis shows Morocco outperforms similar-income countries in regulatory frameworks and public services but faces operational efficiency challenges.
The Bretton Woods institution recommends that the country address high costs and barriers to formal hiring, improve transparency in dispute resolution, expand digital processes, and complete the legal framework for insolvency cases.
Recent inflationary pressures have impacted household purchasing power, leading to decreased confidence indicators.
However, Diaz Cassou notes that “inflation should remain controlled despite certain trends observed during Ramadan, a period when price pressures are traditionally observed.”
The current account deficit is expected to widen slightly while remaining notably below historical averages, reflecting the recovery of domestic demand in the Moroccan economy.
Capping the discussion, the senior economist spotlighted the public sector as a pivotal force shaping Morocco’s economic trajectory, noting its expanding role aligns seamlessly with the ambitions of the New Development Model.
