Casablanca – Despite challenges in the agricultural sector, Morocco’s economy is projected to grow by 5.0% in 2025, up from 3.3% in 2024, according to a recent report by Fitch Solutions. The positive outlook is driven by strong foreign direct investment (FDI), sustained private consumption, and supportive monetary policies.

Revised growth forecast

Fitch Solutions initially estimated Morocco’s growth at 5.6% for 2025 but later revised it down to 5.0%, citing emerging signs that agricultural production will fall below historical averages. However, despite this adjustment, the new forecast remains above the consensus estimate of 3.9% from Focus Economics.

The Moroccan economy is expected to benefit from robust activity in the non-agricultural sectors, which will offset weaknesses in agriculture. Key industries such as automotive manufacturing, aerospace, renewable energy, and tourism are anticipated to contribute significantly to economic expansion.

Investment and monetary policy supporting growth

Investment will play a central role in Morocco’s economic growth, bolstered by strategic infrastructure projects and rising foreign capital inflows. In 2024, net FDI surged by 55.4% year-on-year, and the momentum is expected to continue into 2025, particularly in sectors like automotive, aeronautics, and clean energy.

Morocco’s central bank, Bank Al-Maghrib, is also expected to maintain an accommodative monetary policy to stimulate economic activity. The report forecasts a further 25-basis-point cut in the benchmark interest rate in 2025, following a 50-basis-point reduction in 2024, bringing the key rate down to 2.25% by the end of the year. This policy aims to lower borrowing costs, encourage private sector investment, and support household spending.

Household consumption and tourism to remain strong

Private consumption is expected to stay resilient in 2025 due to several factors:

  1. Government fiscal policy: The government plans an 11.5% increase in public sector wages and personnel expenditures, which will boost disposable income.
  2. Low inflation: With inflation forecasted to average 1.6% in 2025, consumer purchasing power is expected to remain stable.
  3. Stable remittances: Given stronger economic growth in Europe, where over 80% of Moroccan expatriates reside, remittance inflows are expected to continue supporting household spending.

The tourism sector is also projected to experience continued expansion, with Morocco set to welcome 17.8 million visitors in 2025, up from 16.8 million in 2024. Major events like the 2025 African Cup of Nations, along with Morocco’s preparations for co-hosting the 2030 FIFA World Cup, are expected to attract more international tourists and investment in hospitality infrastructure.

Trade and external factors

The contribution of net exports to GDP growth is expected to remain modest. While Morocco will benefit from stronger demand for its automotive and textile exports due to accelerating economic activity in Europe (expected to grow from 1.3% in 2024 to 1.5% in 2025), this will likely be offset by rising agricultural imports and limited growth in agricultural exports.

Potential risks to economic growth

Despite the positive outlook, Fitch Solutions highlights several downside risks that could hinder Morocco’s economic performance:

  • Agricultural sector challenges: Given that nearly 30% of Morocco’s workforce is employed in agriculture, any further decline in output could have broader economic consequences, including higher unemployment and greater reliance on food imports.
  • Geopolitical uncertainties: Rising tensions in the Middle East, particularly between Israel and Iran, could lead to higher oil prices, increasing Morocco’s import costs and inflationary pressures.
  • Global trade dynamics: Slower-than-expected growth in Europe and the United States could weaken demand for Moroccan exports, particularly in key industries like automotive and textiles.

While Morocco faces challenges related to agriculture and global economic conditions, the overall economic outlook for 2025 remains positive. The country’s diverse industrial base, strong FDI inflows, expanding tourism sector, and supportive monetary policies are expected to drive growth. If the non-agricultural sectors continue their upward trajectory, Morocco could maintain one of the fastest-growing economies in the region in the coming year.