According to a World Bank economic monitoring report, Morocco’s real gross domestic product grew by 4,9 % in 2025, driven heavily by public expenditure and favorable rainfall. This expansion follows growth rates of 3,8 % in 2023 and 4,4 % in 2024, placing the North African nation above the averages for both the Middle East and North Africa region and developing emerging economies.
The latest “Morocco Economic Monitor” produced by the World Bank’s MENA unit within the Economic Policy Department highlights a stark divergence between robust public sector activity and sluggish private demand. While macroeconomic indicators show inflation settling at 0,8 % and core inflation at 0,6 %, household consumption has slowed significantly despite rapid disinflation and improving consumer confidence.
Public Investment Fuels 2025 Expansion
According to the World Bank, Morocco’s economic growth relied primarily on a 16,3 % jump in investment during 2025, following a 13,9 % increase in 2024. Bank Al-Maghrib confirmed these figures in its annual report, noting that gross fixed capital formation climbed by 14,4 %. This momentum stems directly from major infrastructure projects tied to preparations for the 2030 World Cup.
Public consumption also surged by 5,1 %. The World Bank attributes this increase to the expansion of social protection programs—which added 0,2 percentage points to GDP—and the reinforcement of public services, adding roughly 0,7 percentage points. Data from the international financial institution shows that public investment and consumption have consistently outpaced nominal GDP growth since the pandemic.
Household Consumption Slumps Amid Rising State Spending
In contrast to the state-led boom, private demand remains remarkably weak. According to long-term series published by Bank Al-Maghrib, household final consumption growth dropped from 4,7 % in 2023 to 2,9 % in 2024, and fell further to 1,2 % in 2025. This marks the weakest consumer performance recorded since 2022, creating what the World Bank describes as a clear economic paradox.
Normally, rapid disinflation and stabilizing consumer confidence would encourage retail spending. However, households have reined in budgets. The Ministry of Economy and Finances interprets the data differently. In a presentation submitted to the Government Council, the ministry argued that household consumption “benefited from the gradual improvement of purchasing power and the mitigation of inflationary pressures.”
Medium-Term Economic Outlook and Projections
Despite differing interpretations of current consumer data, both the Moroccan government and international lenders project a multi-year adjustment. The World Bank forecasts a gradual rebalancing of the economy over the medium term. According to the institution’s baseline scenario, private consumption should recover to reach 4,8 % by 2028 as the current heavy investment cycle reaches maturity.
Fiscal indicators show marked improvement alongside these growth shifts. According to the World Bank report, Morocco’s budget deficit narrowed to 3,5 % of GDP by the end of 2025, down sharply from 7,1 % in 2020. Treasury debt stabilized at 66,6 %, while foreign exchange reserves reached approximately $47 billion at the end of 2025—representing 5,4 months of imports—before climbing to $49 billion by the end of March 2026. These stabilizing fundamentals prompted S&P to upgrade Morocco’s sovereign debt to investment grade.
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