Oil surge tests Morocco’s economy as energy bill jumps 29.1%

Morocco is absorbing a sharp rise in global energy prices without allowing the shock to translate immediately into broad-based inflation. By the end of August, consumer prices had increased by just 0.3%, even as Brent crude climbed to around $116 a barrel on September 22.

The contrast highlights the unusual protection provided by Morocco’s stronger agricultural performance this year. At the same time, however, the country is paying a growing external price for expensive energy and higher import demand, according to the latest economic assessment from the Direction of Studies and Financial Forecasts (DEPF).

Brent prices had risen by roughly 70% since the beginning of July, following a peak of nearly $132 a barrel on September 15. Yet the impact on Moroccan households remained relatively limited, at least for now.

A strong harvest helps contain food prices

Agriculture has emerged as one of the main buffers against the international price shock. Morocco’s 2026 cereal harvest is estimated at 90 million quintals, more than twice the 43.1 million quintals recorded a year earlier.

Improved water availability has reinforced that recovery. Dam reserves reached a filling rate of 66.1% on September 21, compared with 32.8% on the same date in 2025.

The stronger agricultural season has helped push food prices down by 1.7% through August. This decline effectively offset a 1.7% increase in non-food prices, with transport costs rising 3.7%.

The authorities have also introduced additional support measures for road transport operators, including an exceptional 30-day aid scheme announced on September 18, helping limit some of the pressure generated by higher fuel costs.

Household demand remains resilient

The combination of low inflation and stronger agricultural conditions is helping sustain domestic consumption. Transfers from Moroccans living abroad rose 8.1% through July, while consumer lending increased 4.5%.

Investment is also gaining momentum. General-budget investment expenditure reached 75.7 billion dirhams by the end of August, an annual increase of 11.4%. Imports of capital goods climbed 20.8%, while loans allocated to equipment investment rose 30.8%.

The figures point to an economy in which domestic demand remains relatively solid, despite a more difficult external environment.

But that resilience is also contributing to a widening trade imbalance.

Energy imports deepen the trade deficit

Morocco’s merchandise imports reached 544 billion dirhams by the end of July, up 15.9% from a year earlier. Exports increased at a considerably slower pace, rising 8.4% to 299.3 billion dirhams.

As a result, the trade deficit expanded 26.5% to 244.7 billion dirhams. The import coverage ratio consequently fell by 3.8 percentage points to 55%.

Energy is a major source of the deterioration. The country’s energy import bill rose 29.1% to 81.2 billion dirhams, accounting for 14.9% of total imports, compared with 13.4% a year earlier.

The figures underline the limits of Morocco’s domestic inflation shield: lower consumer-price pressure does not necessarily mean a lower cost for the national economy.

Tourism and diaspora transfers provide less cover

Morocco continues to benefit from substantial foreign-currency inflows generated by tourism and its diaspora. Travel receipts reached 79 billion dirhams by the end of July, up 13.4%, while transfers from Moroccans living abroad stood at 74.8 billion dirhams.

Together, the two sources generated 153.8 billion dirhams, equivalent to 62.9% of the merchandise trade deficit. A year earlier, they covered 71.8% of the gap.

The decline in this coverage ratio suggests that even strong services and remittance revenues are struggling to keep pace with the rapid expansion of the merchandise deficit.

Automotive exports remain a key strength

The automotive industry continues to provide an important counterweight. Vehicle-related exports reached 107.1 billion dirhams during the first seven months of the year, representing an increase of 14.9%.

The sector accounted for 35.8% of Morocco’s total exports, maintaining its position as the country’s leading export industry.

Other segments are facing a more complicated environment, however, particularly the phosphate industry.

Sulfur costs squeeze the phosphate industry

Morocco’s fertilizer industry is facing a sharp increase in the cost of sulfur, a critical input for fertilizer production. Sulfur imports reached 20.2 billion dirhams between January and July, compared with approximately 7.9 billion dirhams during the same period a year earlier.

The increase came despite a 9% decline in imported volumes, indicating the scale of the price effect.

At the same time, exports of phosphates and their derivatives fell 7.8% to 51 billion dirhams. The weakness extends to domestic production, with the mining sector’s production index dropping 28.8% in the second quarter.

The combination of higher input costs and weaker phosphate exports adds another layer of pressure to Morocco’s external accounts.

Public finances show limited improvement

The pressure on the external balance has not been mirrored by a deterioration in the budget deficit. By the end of August, the fiscal shortfall had narrowed slightly by 1.6% to 58.6 billion dirhams.

Ordinary revenues increased 10%, outpacing the 7.8% growth in overall expenditure.

Monetary policy is also being kept steady. At its September 22 meeting, Bank Al-Maghrib maintained its benchmark interest rate at 2.25%, citing exceptionally high levels of uncertainty.

For Morocco, the immediate challenge is therefore less about containing headline inflation than managing the cost of external shocks. A strong harvest has provided households with an important cushion, but the rising energy bill, expanding trade deficit and higher industrial input costs show that the economy has not escaped the consequences of the global commodity surge.