Casablanca – The World Bank has underscored the potential economic impact of Morocco’s ongoing regulatory reforms, suggesting that measures aimed at strengthening the role of the private sector could play a decisive role in boosting growth, expanding employment, and gradually reducing the size of the informal economy. These conclusions were outlined in the institution’s latest update of its Global Economic Prospects, released in Washington, and place Morocco among the countries where policy reforms are expected to yield tangible economic dividends over the coming years.

According to the World Bank, the scope and depth of the regulatory reforms implemented in Morocco have exceeded initial expectations. These reforms are designed to improve the business climate, encourage private investment, and facilitate market entry for small and medium-sized enterprises. By addressing structural constraints that have long limited productivity and formal job creation, the reforms are expected to enhance the economy’s capacity to generate sustainable growth.

A central objective of these measures is to reduce the weight of the informal economy, which continues to employ a significant share of the workforce but often operates outside regulatory and social protection frameworks. The World Bank considers that simplifying regulations, improving transparency, and strengthening competition could incentivize firms to transition into the formal sector. Such a shift would not only broaden the tax base but also improve working conditions and access to social security for a larger number of workers.

The reform momentum is unfolding in a context that the World Bank describes as more favorable than in recent years. One contributing factor has been the improvement in agricultural output, supported by more favorable weather conditions. After several seasons marked by drought and climate-related stress, agricultural production has shown signs of recovery, providing a lift to rural incomes and contributing positively to overall economic activity. While agriculture remains vulnerable to climatic volatility, its short-term rebound has helped stabilize growth dynamics.

External balances have also shown signs of improvement. The World Bank notes that Morocco’s current account position has benefited from increased remittances from Moroccans living abroad, as well as stronger tourism revenues. Remittance inflows continue to play a stabilizing role by supporting household consumption and providing foreign exchange, while tourism has regained momentum as travel flows normalize and the sector benefits from sustained investment in infrastructure and services.

On the fiscal front, the World Bank expects a gradual narrowing of budget deficits in oil-importing countries, including Morocco, over the 2026–2027 period. This adjustment is partly attributed to the adoption of more restrictive fiscal and monetary policies aimed at preserving macroeconomic stability. In Morocco’s case, policy efforts have focused on containing deficits while maintaining priority spending, particularly in areas linked to social protection and investment.

Despite these positive signals, the World Bank’s assessment also points to a more nuanced growth outlook across sectors. Economic growth in Morocco is projected to average around 4.4 percent in 2026, reflecting a solid expansion compared with recent years. However, this growth is expected to be uneven across sectors. Agricultural activity, while recovering, is likely to expand at a more moderate pace, reflecting ongoing structural challenges and climate risks. Manufacturing growth is also projected to remain relatively subdued, amid global uncertainties and shifting trade conditions.

Employment growth, according to the report, is expected to be more moderate as well. While regulatory reforms and private sector development are anticipated to support job creation, the pace may not be sufficient in the short term to fully absorb labor market pressures, particularly among young people and new labor market entrants. This underscores the importance of complementary policies in education, skills development, and labor market integration to ensure that growth translates into broad-based employment gains.

At the global level, the World Bank projects a slight easing of economic growth to 2.6 percent in 2026, followed by a recovery to 2.7 percent in 2027. This trajectory points to a period of relative stabilization after years marked by shocks and volatility. In this global context, Morocco’s projected growth rate stands out as comparatively resilient, reflecting both domestic reform efforts and the benefits of economic diversification.

Importantly, the World Bank’s latest projections represent an upward revision compared with its estimates published earlier in the year. This revision reflects improved assessments of policy implementation, external conditions, and sectoral performance. For Morocco, it signals growing confidence among international institutions in the country’s reform agenda and its capacity to translate policy changes into measurable economic outcomes.

Looking ahead, the World Bank’s analysis suggests that sustaining reform momentum will be critical. Continued efforts to deepen regulatory reforms, strengthen institutions, and support private sector development are seen as essential to maintaining growth, reducing informality, and expanding employment opportunities. While challenges remain, the combination of policy reforms, improving external balances, and sectoral recovery positions Morocco with a cautiously positive economic outlook in the medium term.