Morocco’s Economy Ends 2025 on a Resilient Note Despite External Pressures

Rabat, The Gulf Observer: Morocco’s economy closed the year 2025 with resilient domestic demand, sustained investment activity and mixed external balances, according to the latest Economic Outlook Report issued by the Ministry of Economy and Finance.

Household consumption remained robust, supported by negative inflation of -0.3% in November, increased remittances from Moroccans living abroad, higher consumer credit, and the creation of 220,000 paid jobs during the third quarter of the year. These factors collectively strengthened purchasing power and sustained internal demand.

Investment activity also gathered pace, driven by major structural projects and a 16.9% rise in state equipment expenditure by the end of November. This momentum was further reinforced by a notable improvement in foreign direct investment inflows, which increased by 28.2% by the end of October, alongside higher imports of capital goods and stronger equipment-related lending.

Sectoral performance reflected broadly positive trends across the primary, secondary and tertiary sectors. Favorable climatic conditions supported the 2025–2026 agricultural season, while dam filling rates reached 34.7% by December 24. Agricultural exports recorded a 7.3% increase by the end of October.

Industrial activity showed mixed but generally positive results. Manufacturing output expanded by 2.2% in the third quarter, while extractive industries registered stronger growth of 7.4%. Electricity production rose by 6.1% by the end of October, and cement sales—an indicator of construction activity—increased by 10.6% by the end of November.

The services sector continued to consolidate its gains, with tourism playing a key role. Tourist arrivals reached 18 million visitors, marking a 14% year-on-year increase, while travel receipts grew by 16.7% by the end of October.

Despite these positive domestic dynamics, external balances came under increasing pressure. Exports grew by 2.6% by the end of October, mainly driven by phosphates and derivatives (+16.7%), aeronautics (+8.3%), and agricultural and agri-food products (+1.1%). However, imports rose more sharply by 9.4%, driven by most product categories except energy, whose imports declined by 4.4%.

As a result, the trade deficit widened by 19.6%, and the coverage ratio fell to 56.5%, highlighting the growing challenges facing Morocco’s external accounts despite solid domestic economic performance.