Casablanca – Morocco’s economy is entering 2026 on a relatively strong footing, with growth accelerating and macroeconomic indicators showing signs of resilience despite an increasingly uncertain global environment marked by energy market volatility and geopolitical tensions.

According to recent updates from the High Commission for Planning, the national economy is estimated to have grown by around 5% in the first quarter of 2026, compared with 4.1% in the fourth quarter of 2025. This improvement reflects a broad-based recovery driven primarily by domestic demand and an exceptional rebound in agricultural production, alongside a gradual improvement in external demand conditions.

At the end of 2025, economic activity had already shown stability rather than acceleration. Growth stood at 4.1% in the fourth quarter, slightly higher than the 4% recorded in the previous quarter. This stability masked contrasting sectoral performances. Manufacturing industries posted a stronger-than-expected recovery, expanding by about 4.1%, supported by the rebound of agro-food industries and pharmaceuticals, as well as renewed activity in related commercial and logistics services.

In contrast, extractive industries and construction remained under pressure, affected by adverse weather conditions and cyclical slowdown. Meanwhile, non-market services continued to expand steadily, helping to stabilize overall economic performance.

Domestic demand remained the primary driver of growth during this period. Household consumption increased by approximately 4.4%, supported by improvements in employment levels and wage income. Investment also maintained a strong trajectory, growing by around 8.5%, although it began to normalize after reaching a peak of about 15% earlier in 2025. However, external trade continued to weigh on growth, as imports grew significantly faster than exports, creating a persistent negative contribution from the foreign sector.

In early 2026, the structure of growth shifted more clearly in favor of supply-side dynamics. Agricultural activity became the main engine of expansion, with output estimated to have surged by around 14.8% in the first quarter. This exceptional performance was largely driven by rainfall levels approximately 86.6% above seasonal norms, which improved crop yields, expanded cultivated areas, and strengthened rural economic activity.

The agricultural rebound alone contributed roughly 1.5 percentage points to overall GDP growth, highlighting its central role in the acceleration of the economy. In contrast, non-agricultural activities grew at a slower pace of around 3.8%, reflecting continued weakness in extractive industries and construction. However, manufacturing remained relatively dynamic, supported by food processing industries and transport equipment production, while the services sector maintained steady growth of about 4.3%.

Overall, domestic demand continued to support the economy, expanding by around 4.8%, though at a slower pace than in late 2025. Household consumption rose by about 4.6%, benefiting from higher rural incomes and easing inflationary pressures. Investment, however, showed signs of moderation, reflecting a more cautious approach by economic actors after several quarters of strong expansion.

Inflation trends also contributed to the overall economic environment. Price levels in the first quarter of 2026 are estimated to have recorded a slight decline of around -0.1%. This disinflation was mainly driven by a drop in food prices, particularly essential commodities such as olive oil, cereals, and certain fresh products. These declines offset modest increases in services and selected non-food goods. Core inflation, excluding volatile and regulated items, also remained negative, reflecting continued downward pressure on food-related components.

External trade dynamics improved modestly compared to previous quarters. Export growth is estimated at around 7.4%, supported by a gradual recovery in European demand and more accommodative monetary conditions in key trading partners. Imports, meanwhile, grew at a slower pace of approximately 6.9%, helping reduce the negative impact of the trade balance on overall growth.

Monetary conditions remained broadly supportive of economic activity. Bank lending increased by around 8.2%, driven mainly by credit for investment and real estate. The monetary authorities maintained an accommodative stance, with stable interest rates and continued liquidity injections to support financial stability. These conditions contributed to relatively favorable financing terms for both households and businesses.

Looking ahead to the second quarter of 2026, the economy is expected to maintain its positive momentum, with growth projected at around 4.7%. This outlook is based on the continued effects of the agricultural recovery and the resilience of domestic demand, particularly household consumption, which is expected to grow by about 4.2%. Investment is likely to continue its gradual slowdown, reflecting a normalization phase after a period of strong expansion.

However, the outlook remains subject to significant external risks. Global energy markets are a key source of uncertainty, with geopolitical tensions contributing to renewed volatility. Oil prices are expected to fluctuate between $85 and $100 per barrel under a central scenario, before gradually easing later in the year. Such developments could exert upward pressure on production costs and inflation, particularly in energy-intensive sectors.

Industries such as fisheries, chemicals, metallurgy, and construction materials are considered particularly exposed to these cost pressures. While the transmission of higher energy prices into broader inflation has so far remained limited, supported by favorable agricultural conditions and price containment measures in transport, risks remain elevated if energy markets tighten further.

Morocco’s economic trajectory in early 2026 reflects a combination of strong agricultural performance, steady domestic demand, and gradually improving external conditions. At the same time, the economy continues to navigate a complex global environment, where energy prices and geopolitical developments remain key factors shaping both short-term stability and medium-term growth prospects.