Casablanca – Fitch Solutions, the research division of the global credit rating agency Fitch Group, has projected a promising outlook for Morocco’s economy in 2025, despite potential global uncertainties. The institution, renowned for providing risk management and economic forecasts, highlighted positive trends in the country’s economic performance, driven by a combination of factors including favorable agricultural conditions, declining inflation, and fiscal policies that promote economic growth.

In its latest report, Fitch Solutions forecasts that Morocco’s economy will grow by 5% in 2025, up from 2.6% in 2024, significantly exceeding the government’s target of 4.6%. The anticipated growth is attributed to several key factors, including an expected rebound in the agricultural sector after years of unfavorable climate conditions, a decline in inflation, and a supportive fiscal policy aimed at boosting consumer demand and investment.

One of the major drivers behind Fitch’s positive forecast is the expected recovery in agricultural production, which will alleviate some of the pressures on Morocco’s trade balance. The report anticipates that the agricultural sector, which employs approximately 27% of the country’s workforce, will benefit from a normal agricultural season, leading to increased exports and a reduced reliance on agricultural imports. Additionally, the institution expects Morocco’s current account deficit to shrink to 1% of GDP in 2025, down from 2.4% in the first half of 2024.

Fitch Solutions also pointed out that Morocco’s economic growth will be bolstered by lower energy prices, with the price of Brent crude oil expected to drop to $82 per barrel in 2025, compared to $85 per barrel in 2024. This reduction in energy prices will help decrease Morocco’s energy import bill, which currently makes up 16% of total imports, further supporting the country’s economic stability.

Growth in exports and investment
The report noted that the Moroccan economy will benefit from a surge in investment, driven by a combination of low interest rates and an expansive fiscal policy. The Bank of Morocco (BAM) is expected to maintain its accommodative monetary stance, with a further 25 basis point rate cut in 2025, following similar measures in 2024. This will continue to stimulate private sector investments, particularly in industries such as automotive, aviation, and renewable energy, which are expected to attract increased foreign direct investment (FDI).

Furthermore, Morocco’s exports are projected to show improvement, especially in the phosphate sector, which has seen a recovery after a difficult 2023. Phosphate exports grew by 7.5% year-on-year in the first half of 2024, and Fitch expects this trend to continue into the second half of the year, potentially doubling export volumes.

The ongoing strong performance of the automotive sector, which saw a 9% year-on-year increase in car exports in 2024, is also expected to contribute positively to Morocco’s overall export growth.

Potential risks and global challenges
While Fitch Solutions’ forecast remains largely optimistic, the agency also cautioned about potential risks that could impact the growth trajectory. The report highlighted several external factors that may influence Morocco’s economic outlook, particularly global geopolitical tensions and fluctuations in global energy prices.

One key concern is the potential for a slowdown in European economic growth. The European Union is a major trade partner for Morocco, and any negative surprise in growth within the eurozone could have adverse effects on Morocco’s export performance. Fitch also noted that the ongoing geopolitical instability in the Middle East, particularly the Israel-Hamas conflict, could lead to a sharp rise in energy prices, which would negatively impact Morocco’s current account and inflation.

Despite these risks, Fitch Solutions emphasized that Morocco’s strategic geographic position and favorable investment environment continue to place the country in a strong position to capitalize on opportunities arising from global shifts, particularly in sectors such as renewable energy and technology.

Fitch Solutions’ forecast for the Moroccan economy in 2025 paints an optimistic picture, driven by a combination of favorable agricultural conditions, supportive fiscal policies, and a projected reduction in energy costs. However, the report also highlights that the global economic and geopolitical landscape remains uncertain, and any negative developments could affect Morocco’s growth prospects. Despite these risks, the country is poised to benefit from continued investment and export growth, making its outlook for 2025 one of cautious optimism.

Fitch Solutions, as a leading provider of risk management and economic analysis, continues to offer valuable insights into the future of Morocco’s economy, providing policymakers and investors with critical data to navigate the challenges and opportunities ahead.