Casablanca – Morocco is heading into 2025 with encouraging economic prospects, supported by sustained public investment, resilient exports, and a continued recovery in tourism. According to the latest report from the European Bank for Reconstruction and Development (EBRD), the country is projected to record 4.2% GDP growth in 2025 and 4% in 2026, outperforming the broader Southern and Eastern Mediterranean (SEMED) region. This forecast places Morocco among the fastest-growing economies in the area, even as global markets face persistent geopolitical tensions and slowing trade.

Strong regional standing

The SEMED region, which includes Morocco, Egypt, Jordan, Lebanon, Tunisia, Palestine, and Iraq, is expected to grow by an average of 3.7% in 2025, up from 3.6% in the first half of the year and sharply higher than the 1.2% recorded in 2024. Growth across the region is being driven by a rebound in tourism, increased remittances, and improving external balances amid easing inflation. However, the EBRD anticipates a slight slowdown to 3.2% in 2026 due to tighter fiscal conditions and ongoing global market uncertainties.

Within this landscape, Morocco stands out for its balanced macroeconomic indicators and steady investment momentum. After achieving 3.8% GDP growth in 2024, the country’s outlook for 2025 reflects not only strong domestic demand but also a robust export sector and controlled inflation.

Budgetary discipline and debt management

Morocco’s fiscal position continues to improve, giving the government more room to support growth. The budget deficit narrowed to $42.7 billion, or 3.9% of GDP, in 2024—below the official target—thanks to stronger-than-expected tax revenues. Authorities aim to further reduce the deficit to 3.5% of GDP in 2025 and 3% in 2026, signaling a commitment to fiscal discipline despite significant infrastructure spending.

Public debt has also been brought under control. The debt-to-GDP ratio fell to 70% in 2024, down from a peak of 72% in 2020. This decline reflects both careful budget management and sustained GDP growth, allowing Morocco to maintain investor confidence while financing strategic development projects.

Inflation under control

Inflation pressures, which have troubled many emerging markets, have eased significantly in Morocco. Average inflation between January and July 2025 dropped to 1.2%, supported by lower food, fuel, and transportation prices. This moderation in consumer prices has strengthened household purchasing power and created favorable conditions for private investment.

External accounts and reserves

The country’s external position remains a key source of stability. Exports of goods rose by 5.8% in 2024, driven by strong performance in phosphates and the expanding automotive industry. Morocco has also benefited from resilient demand for fertilizers, electric vehicle components, and aerospace parts, which continue to diversify its trade portfolio.

Foreign exchange reserves reached $45 billion in August 2025, up 12% year-on-year and covering more than five months of imports. This healthy reserve level provides a buffer against potential shocks, including fluctuations in energy prices and shifts in European demand—critical for Morocco, as the European Union remains its largest trading partner.

Tourism boom and remittances

Tourism has emerged as one of the most dynamic sectors of the Moroccan economy. The country welcomed 17.4 million visitors in 2024, a 20% increase compared with the previous year, followed by a further 16% rise in arrivals between January and July 2025. This surge has boosted foreign currency inflows, supported job creation, and spurred new investments in hospitality and infrastructure.

Remittances from the Moroccan diaspora have also strengthened the balance of payments, providing steady inflows of hard currency and supporting domestic consumption, particularly in rural areas.

External risks remain

Despite these positive fundamentals, Morocco’s economic trajectory remains sensitive to external factors. Growth prospects depend heavily on the performance of the European economy, which accounts for a large share of the country’s exports and remittances. Any slowdown in European demand could affect trade revenues and investment flows.

Climate risks also pose challenges. Agriculture remains a key sector for employment and food security, and erratic rainfall patterns or prolonged droughts could weigh on rural incomes and GDP growth.

Outlook

The EBRD expects Morocco to remain one of the most resilient economies in its region, benefiting from prudent fiscal management, a competitive export base, and rising tourism revenues. The government’s infrastructure agenda—including renewable energy projects, transport modernization, and industrial investments—will continue to underpin growth.

If Morocco maintains its current pace of reform and investment, while navigating external risks, the country is well positioned to consolidate its role as an economic leader in the Mediterranean. With GDP growth forecast at 4.2% in 2025 and inflation contained, Morocco offers a rare combination of stability and dynamism in an increasingly uncertain global economy.