Morocco's economic growth forecast: 3.6% in 2025
Morocco's economy is set to grow by 3.6% in 2025, an increase from 3.2% in 2024, according to the World Bank's latest economic report titled "Prioritizing reforms to boost the business environment." This optimistic projection comes despite the adverse impact of droughts on agricultural output in 2024, with non-agricultural growth surging to 3.8%, largely spurred by a revival in the industrial sector and an upswing in gross capital formation.
The report highlights a decline in inflation, now below 1%, allowing Bank Al-Maghrib to adopt a more accommodative monetary policy. Ahmadou Moustapha Ndiaye, Division Director for the Maghreb and Malta at the World Bank, commented on the robust economic outlook, emphasizing controlled inflation, a stable external position, and a steady approach to fiscal consolidation alongside a consistent debt-to-GDP ratio.
Looking ahead, the agricultural sector is anticipated to improve in 2025, with agricultural GDP expected to rise by 4.5%. Recent rainfall has created more favorable conditions, contributing to a projected stabilization of agricultural GDP growth around 2.6% in the medium term.
Despite these positive indicators, the labor market continues to face significant challenges. Although urban areas generated approximately 162,000 jobs in 2024, the pace of employment growth has not kept up with demographic shifts. Over the past decade, the working-age population has increased by over 10%, while employment has risen by only 1.5%. This disparity is attributed to lingering effects from the pandemic, delayed reforms, and low participation of women in the workforce.
The World Bank's analysis reveals that Morocco outperforms similarly situated countries in regulatory frameworks and public services but struggles with operational efficiency. The institution recommends addressing high costs and barriers to formal hiring, enhancing transparency in dispute resolution, expanding digital processes, and solidifying the legal framework for insolvency cases.
Furthermore, recent inflationary trends have negatively impacted household purchasing power, leading to a dip in consumer confidence. However, Diaz Cassou reassures that "inflation should remain controlled despite certain trends observed during Ramadan, a period typically associated with price volatility."
The current account deficit is expected to widen slightly but will remain significantly below historical averages, reflecting a recovery in domestic demand within the Moroccan economy. Conclusively, the public sector emerges as a key player in shaping Morocco's economic landscape, aligning with the aspirations outlined in the New Development Model
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