Introduction
In 2025, Morocco's central bank, Bank Al-Maghrib, presented its annual report to King Mohammed VI, reviewing the domestic and international economic situation over the past year and outlining the Bank's main policy directions. The report noted that despite global geopolitical conflicts and trade frictions, the Moroccan economy maintained steady growth, inflationary pressures eased markedly, and fiscal conditions improved, while challenges such as employment and structural transformation remained prominent.
Global Economic Environment
According to the report, global economic growth remained at 3.4% in 2025, unchanged from the previous year, mainly thanks to strong investment in artificial intelligence and technology, accommodative financial conditions, and fiscal support in many countries. However, the outbreak of war in Iran disrupted global supply chains and heightened uncertainty. At the same time, large fiscal deficits and defense spending pushed global public debt to about 94% of GDP, raising concerns about medium-term fiscal sustainability.
On the trade front, after the United States imposed tariffs, retaliatory measures were limited, and various bilateral and multilateral trade agreements were concluded. Trade tensions eased in the second half of the year, and global trade and cross-border investment recovered. Commodity markets diverged: oil prices continued to fall due to ample OPEC+ supply and moderate demand; precious metal prices hit record highs on safe-haven demand and a weaker dollar; and fertilizer prices rose significantly owing to strong demand and export restrictions.
Against this backdrop, global inflation continued to moderate, albeit unevenly: the euro area was close to the European Central Bank's target, while the United States remained above the Federal Reserve's target. Apart from the Bank of Japan, major advanced-economy central banks maintained accommodative stances, supporting equity market gains.
Morocco's Domestic Economy
Morocco's economic growth accelerated from 4.4% in 2024 to 4.9%. In addition to favorable weather conditions, the non-agricultural sector—especially construction and tourism—remained dynamic, and public services continued to expand, with improvements in social welfare and wage levels. Investment, particularly public investment, remained the main engine, growing by 16.3%, with a focus on climate adaptation, infrastructure for major international events, expansion of health facilities, and post-earthquake reconstruction in the Al Haouz region.
To this end, the government added 13 billion dirhams to the budget, also used to support purchasing power and the outcomes of the social dialogue. On the revenue side, tax revenues grew by 15.3%, benefiting from tax reforms since 2022, stronger economic activity, improved tax collection, and the voluntary regularisation campaign in 2024. Innovative financing mechanisms brought in 40.1 billion dirhams. The fiscal deficit (excluding proceeds from the sale of state equity stakes) narrowed from 3.9% in 2024 to 3.5% in 2025, and government debt as a share of GDP fell to 66.6% (domestic debt 49.1%, external debt 17.4%).
Inflation and Employment
Despite the accelerating economy, inflation in Morocco remained low, averaging only 0.8% for the year. This was mainly related to the decline in international oil prices, while fresh meat prices fell after the King's call to forgo sacrificial livestock, olive oil prices dropped due to a bumper harvest, and the central bank's appropriate monetary policy also contributed to curbing prices.The labor market improved: 193,000 new jobs were created in 2025 (82,000 in 2024, and -157,000 in 2023). However, the labor force participation rate remains low: of the 407,000 increase in the working-age population, only 177,000 entered the labor market, so the unemployment rate still stands at 13%, and the upward trend in unemployment among women and youth aged 15-24 has not been reversed. In terms of job quality, contract-based positions increased, but temporary and seasonal work also rose.
External Sector and Balance of Payments
Strong investment drove import growth of 8% (the energy bill shrank due to falling international oil prices), while exports grew 3%, led by phosphates and derivatives and the aviation industry. Automobile exports posted their first decline in years (except for 2020 during the pandemic). International tourism performed strongly, with tourism revenue reaching 138.6 billion dirhams; remittances rose to 122 billion dirhams, offsetting the widening trade deficit (20.5% of GDP) and helping keep the current account deficit at 2.4% of GDP.
Foreign direct investment surged to 60.6 billion dirhams (3.5% of GDP). Morocco regained its "investment grade" sovereign credit rating, allowing it to issue 20.9 billion dirhams in treasury bonds on favorable terms. Official reserve assets consequently rose to 442.9 billion dirhams, equivalent to 5 months and 11 days of imports of goods and services, in line with IMF adequacy standards.
Monetary Policy and the Foreign Exchange Market
The central bank continued to deepen the foreign exchange market, allowing the exchange rate to better reflect supply and demand. Supported by solid reserves and macroeconomic stability, the dirham's exchange rate against the US dollar remained within its fluctuation band without requiring central bank intervention.
Conclusion
The Bank of Morocco's 2025 annual report shows the economy's resilience in a complex international environment, while also highlighting long-term challenges such as fiscal sustainability, youth employment, and industrial diversification. The central bank will continue to focus on price stability and financial stability, and promote structural reforms to support sustainable development.