Economy: All Indicators Turn Green

The recent rains recorded across the country have revived optimism within the agricultural sector, particularly for cereal crops, which remain at the heart of the current agricultural season, with an area planned by the Ministry of Agriculture of 4 million hectares.

These rains, accompanied by snowfall, are also contributing significantly to increasing dam water levels and strengthening the groundwater table. Consequently, the national reservoir fill rate reached 5.4 billion cubic meters as of December 17, representing a rate of 32.2% compared to 28.8% during the same period last year.

It is important to note that the regular frequency of these rains, which have continued since October and are not expected to stop anytime soon, remains important for the various autumn crops. This is even prompting some farmers, who had abandoned cereals in recent years due to successive drought years, to reconsider their crop choices.

If this scenario is confirmed, Morocco could record a relatively favorable agricultural season, with positive repercussions across the entire sector. This could notably help reduce reliance on imports and thereby ease pressure on the trade balance.

In any case, in its last council meeting of this year, held on December 16, Bank Al-Maghrib maintained its assumption of achieving 50 million quintals, knowing that the average achieved in a normal agricultural year is 75 million quintals. Thus, the agricultural sector’s value added should reach 4% in 2026, after 5% this year.

Olives: Nearly 2 million tons

Apart from cereals, all other crops are evolving under good auspices, notably the olive sector, which achieved a production of 2 million tons, more than double that of the previous year (+106%). Meanwhile, citrus production is strengthening with 1.9 million tons, a 27% increase. Finally, dates recorded a production of 160,000 tons, up 55% compared to the previous season.

The growth of non-agricultural activities, on the other hand, is expected to remain vigorous thanks to the strong investment momentum observed, to reach 4.8% in 2026, instead of the current 5%. Overall, economic growth would show a notable acceleration to 5% this year and will consolidate at an average of 4.5% over the next two years.

The Ministry of Finance, for its part, forecasts GDP growth of 4.8% this year, which has already achieved growth of 5.2% at the end of the first half of last year.

Still according to Bank Al-Maghrib’s projections, inflation should gradually accelerate to converge towards levels in line with the price stability objective. However, the central bank has revised its forecasts downward, with an average level around 0.8% compared to the initially projected 1%, before settling at 1.3% in 2026 instead of 1.9%, and at 1.9% in 2027.

Balance of payments improving

On the foreign trade front, the momentum of exchanges would continue in the medium term, with exports improving by 4.5% in 2025, 8.4% in 2026, and 7.9% in 2027. They would continue to be driven by the phosphates and derivatives segments, as well as the automotive industry, whose shipments are expected to reach 108 and 208 billion dirhams, respectively.

Given the investment efforts undertaken, the pace of imports would remain sustained, driven mainly by acquisitions of capital and consumer goods. However, the energy bill would ease further in 2025 and 2026, before recording an increase in 2027 to 101 billion dirhams.

The balance of payments should also remain supported by the continuous improvement in tourism receipts and foreign direct investment flows. The former are expected to amount to 155 billion dirhams, while the latter would generate annual revenues equivalent to 3.5% of GDP.

For their part, MRE (Moroccans Residing Abroad) remittances are expected to grow by an annual average of 3.1% between 2025 and 2027 to 130 billion dirhams. Taking these elements into account, as well as the Treasury’s planned external financing, official reserve assets would strengthen to reach 448 billion dirhams by the end of 2027, ensuring coverage of nearly five and a half months of imports of goods and services.

Despite the improvement in the economic landscape, the BAM council remains “prudent” and has therefore decided to keep its key interest rate unchanged at 2.25% for the 3rd consecutive time.

This decision is explained by a still high level of uncertainty, linked notably to the persistence of international geoeconomic tensions despite the end of the US budget blockage, to still critical climatic conditions internally, and to inflation that is expected to continue to evolve at low levels.

Growth: Scenarios range from 3.7% to 4.6% in 2026

Growth scenarios are multiplying and are not alike. The 2026 Finance Law projected a rate of 4.6% in 2026, the most optimistic projection compared to other institutions.

Indeed, the HCP and the EBRD anticipate growth of 4%, while the IMF expects 4.2% and the World Bank 4.5%. For the OECD, GDP should show a progression of 4.2% next year, while the AfDB estimates it would rise by 3.7%.

This is then the lowest forecast compared to the others and represents a gap of 90 basis points compared to the highest one, that of the Ministry of Finance.