Morocco’s economic growth is projected to slow to 4.2% in 2026 after reaching its strongest pace in a decade, as large infrastructure projects support activity while higher energy costs, drought risks and weak job creation weigh on the outlook.Gross domestic product expanded by an estimated 4.9% in 2025, powered by public investment linked to preparations for the 2030 FIFA World Cup and a recovery in agricultural production. Continued construction spending and stronger domestic demand are expected to keep growth above its longer-term average this year, despite the moderation.
The government is investing more than 190 billion dirhams in railways, roads, airports, stadiums and urban infrastructure before Morocco co-hosts the World Cup with Spain and Portugal. The programme has accelerated building activity and increased imports of machinery, materials and equipment.
Projects include airport expansion, rail upgrades and new or renovated sporting venues across major cities. Authorities are seeking to use the tournament as a catalyst for wider economic development rather than treating the event as a four-week sporting investment.
Tourism is another central part of the strategy. Morocco plans to add 60,000 hotel beds by 2030, expanding capacity by about one-fifth. The country has added roughly 45,000 beds over the past four years, taking the total to slightly more than 300,000.
Nearly 20 million visitors travelled to Morocco in 2025, while the government is targeting 26 million annual arrivals by 2030. Tourism accounts for about 7% of GDP and supports hundreds of thousands of jobs, making improvements in transport links, accommodation and urban services economically significant beyond the tournament.
Tourism receipts are expected to rise from 138 billion dirhams in 2025 to a record 161 billion dirhams in 2027. Authorities are also working to attract more travellers from China, the United States and the Middle East, reducing the sector’s dependence on traditional European markets.
The outlook faces pressure from the conflict in the Middle East, which has raised oil prices, freight costs and uncertainty across global trade. Morocco imports most of its energy requirements, leaving households, companies and public finances exposed to prolonged increases in fuel prices.
The economic impact of the conflict could reduce Morocco’s growth by about 0.8 percentage points compared with estimates made before the escalation. Costlier energy could also widen the current-account deficit as infrastructure-related imports remain elevated.
Inflation averaged only 0.8% in 2025, easing pressure on consumers after several years of higher food and transport costs. The budget deficit narrowed to 3.5% of GDP, supported by stronger government revenue, while Morocco regained an investment-grade sovereign credit rating.
Agriculture remains a major source of both growth and volatility. Improved rainfall helped output recover last year after several years of drought, but water scarcity continues to threaten farms, rural employment and industries dependent on reliable supplies.
Growth is also closely tied to conditions in Europe, particularly France and Spain, which together account for a large share of Morocco’s trade. A weaker European recovery could restrain exports, tourism demand and investment flows, while higher trade barriers would add pressure on manufacturing.
The strength of headline growth has not produced enough employment. Broader measures of labour underutilisation have reached 22.5%, highlighting the number of people who are unemployed, underemployed or available for work but not fully participating in the labour market.
Women’s participation remains particularly low despite improvements in education. Between 2000 and 2024, Morocco’s working-age population grew about two-and-a-half times faster than employment, leaving job creation as one of the government’s most difficult structural challenges.
The country is expanding its industrial base in automobiles, aerospace components, renewable energy and electric-vehicle supply chains. A planned battery gigafactory led by China’s Gotion High-Tech is expected to begin with annual capacity of 10 gigawatt-hours and could eventually scale up to 100 gigawatt-hours.
Morocco’s next phase of growth is expected to depend increasingly on productivity rather than public construction alone. Fewer than one in five companies make intensive and integrated use of advanced digital technologies, including enterprise software, customer-management systems and e-commerce platforms.
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