New Data Shows Morocco at High Climate Risk as Water Resources Fall Sharply

Mohammedia – Morocco is entering a highly sensitive period in its climate change cycle, where drought trends may impede economic growth amid persistent water scarcity.

Morocco is currently recovering from a protracted drought period that lasted between 2019 and 2025. As such, there is a high likelihood that the country is about to embark on another period within its climate change cycle, which may compromise the sustainability of an economy that relies on 81% of its agricultural land on rainfall, and can extend to energy, urban supply, and fiscal stability as well.

This is being compounded by rising temperatures, scarce and unpredictable precipitation, and low dam levels. The level of hydroelectricity generated has reduced, drinkable water reserves are strained, and heatwaves are becoming more prominent.

The impact of global warming is directly contributing to reduced productivity, reduced income, and ultimately, state revenue. The short-term effects on GDP are modest, but the long-term effects continue to escalate.

A water crisis with system-wide economic impact

Morocco’s hydric stress is both structural and climate-based. As indicated by the strategic report on the IMIS, there is a degradation of renewable resources that have reduced from 22 billion cubic meters in the 1970s to less than 15 billion cubic meters currently. This while having exceeded safe thresholds due to over-extraction, particularly due to territorial disparities whereby 15% of the territory accounts for almost 70% of exploitable resources, making the southern and Atlantic basins regions with severe water scarcity.

Agriculture, which accounts for over 80% of withdrawals, remains the most affected area. Despite modernization due to irrigation innovations, increases in high-demand but water-intensive commodities such as avocados, tomatoes, and out-of-season vegetables have absorbed most of these efficiencies.

Now that 2023 has been recorded as Morocco’s hottest year on record, agricultural output is forecast to decline, which will continue to erode rural income and domestic demand. This, in turn, slows overall growth and reduces public revenue.

The economic losses over the long term are assessed in the climate change scenario associated with the 2026 budget outlook.

A high warming scenario could see GDP per capita fall by 0.7% in 2050, increasing to 1.3% in a very hot scenario. The moderate scenario remains on track with no change, while the Paris Agreement scenario provides a +0.3% benefit because of less warming and economic losses.

Fiscal indicators follow the same pattern: under Paris alignment, the deficit would improve by –0.04 points of GDP and public debt by –0.4 points by mid-century. Under severe warming, the deficit would rise by +0.14 to +0.3 points, and the debt ratio by +1.2 to +2.1 points.

Climate risks assume a pivotal role in fiscal projections

This changing climate backdrop is explicitly acknowledged in the government’s Budgetary Programming Document (PBT) for 2024–2026. The PBT sets the target of reducing the deficit to 3% of GDP and lowering public debt to less than 70% by 2026, but it warns that climate disruptions could derail these goals.

The projection of GDP growth at 3.7% in 2024 and advancing to 4% by 2026 is pegged on a return to an average level of agricultural activity. Climate change trends such as prolonged drought and temperature spikes cast a shadow of doubt on this expectation.

A look at past shock experiences shows that adverse effects could happen because, for example, years of severe drought raised expenditures on butane, wheat, and transport subsidies, straining public finances and delaying fiscal consolidation.

The PBT expects that such strains could recur if agricultural conditions continue to deteriorate, making climate volatility a direct fiscal threat.

To address this issue, interventions by the state include increased investments in desalination, recycling, repairing dams, and transferring water across basins. The purpose is to stabilize the supply of drinking water while facilitating farming.

However, the IMIS report stresses that infrastructure alone is insufficient. Fragmented hydrological data, weak coordination across agencies, and the absence of a unified national water information system continue to limit the effectiveness of policy responses.