World Bank forecasts strong economic outlook for Morocco with focus on structural reforms

the World Bank’s Regional Director for the Maghreb and Malta, Ahmadou Moustapha Ndiaye said that Morocco’s economic prospects remain robust, supported by controlled inflation and a strong external positioning.

 He highlighted the country’s steady path toward fiscal consolidation and the stabilization of its debt-to-GDP ratio. 

In a meeting with journalists on Wednesday, during the presentation of the World Bank’s latest report titled Prioritizing Reforms to Improve the Business Environment, Ndiaye stressed the importance of continuing structural reforms to address recent shocks and challenges in employment, particularly those affecting Morocco’s youth. 

He described these reforms as crucial for ensuring sustained economic growth and pointed out that improvements must focus on enhancing the business climate.

According to the World Bank’s forecasts, Morocco’s overall growth rate is expected to rise to 3.6% in 2025, followed by 3.5% in 2026. 

Javier Díaz Caso, the bank’s chief economist in Morocco, explained that the growth slowdown to 3.2% in 2024 was due to the effects of drought, though non-agricultural sectors saw a positive growth rate of 3.8%, driven by industrial activity and capital formation. 

Inflation decreased to below 1%, allowing Morocco’s central bank to initiate a more accommodative monetary policy, with Morocco being one of the first countries in the MENA region to ease its monetary stance.

The report also highlighted that Morocco’s external position remains stable, with a moderate current account deficit being financed by increased foreign direct investment. Despite spending pressures, the country’s debt-to-GDP ratio is slowly decreasing. 

Significant social and economic challenges persist, particularly in the labor market. 

Despite some improvements in urban labor markets, the creation of jobs remains a major challenge. The number of working-age individuals grew by more than 10% over the past decade, while job opportunities increased by just 1.5%, exacerbating issues for women’s labor force participation.

The World Bank report emphasized the need for continued labor market reforms, especially revising the 2004 labor code.

 It suggested a balanced approach to these complex reforms, citing the example of Scandinavian countries in adapting to labor market needs while ensuring social protection systems are robust. 

The report proposed addressing high costs, barriers to formal employment, and increasing digital efficiency to improve Morocco’s business climate and foster inclusive economic growth.

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