Morocco’s economy has been recovering, with inflation easing, growth accelerating and investment reaching record levels. Yet household sentiment remains weak, with many Moroccans saying their financial situation is still getting worse.
In its latest annual report, Bank Al-Maghrib says this gap between what official figures show and what people actually feel has become important enough to deserve its own analysis.
The Bank uses a concept that has gained traction abroad: the “vibecession.” The term, popularized by Nobel Prize-winning economist Paul Krugman, describes a situation where economic indicators point to a healthy economy while consumers remain pessimistic about their own financial reality.
The report explains that governments usually judge economic performance through measurable indicators such as GDP growth, inflation and employment.
Households, however, judge the economy through what they pay at the grocery store, whether they can save money at the end of the month, how secure their jobs feel and whether they expect life to become easier or harder.
To track how people feel about the economy, Morocco’s High Commission for Planning (HCP) has carried out a quarterly household confidence survey since 2008. The survey measures how households view their own financial situation and the country’s economic outlook through its Household Confidence Index.
Between 2008 and 2019, household confidence rose when the economy grew and fell when it slowed. That trend continued in 2020, when both economic activity and confidence dropped during the pandemic.
Since then, however, the two have drifted apart. While economic growth recovered from 1.8% in 2022 to 4.4% in 2024, household confidence remained near its lowest level since the index was introduced.
The index only began showing improvement in the second quarter of 2025, when growth reached 5.5%.
The report found that inflation and unemployment shape household confidence far more than GDP growth. People tend to notice higher prices and job losses much more quickly than improvements in economic growth.
Inflation eases, but households still feel the squeeze
Consumer prices surged by 6.6% in 2022, before easing to 6.1% in 2023. Bank Al-Maghrib then brought inflation close to its target, with the annual rate falling to 0.9% in 2024 and projected to average around 1% in 2025.
Despite this dramatic improvement, Bank Al-Maghrib says people do not experience inflation the same way economists measure it.
Inflation measures how quickly prices are rising, not whether prices are high. Even when inflation slows, food, housing and transportation remain much more expensive than they were before the inflation shock.
Consumers continue paying those higher prices every day, making it difficult for confidence to recover as quickly as inflation itself.
Growth picks up, confidence doesn’t
After slowing to 1.5% in 2022 because of drought and external shocks, Morocco’s economy expanded by 3.4% in 2023 and accelerated to 3.8% in 2024. Bank Al-Maghrib expected growth to reach 4.6% in 2025 as agricultural output improved and non-agricultural sectors continued expanding.
The report says gross investment reached 33.6% of GDP in 2025, one of the highest levels recorded in recent years and well above many emerging economies.
The labor market has also started to stabilize after years of pressure. The unemployment rate edged down from 13.3% in 2024 to 13.2% in the first quarter of 2025, while the economy created around 282,000 jobs over the same period.
Despite those improvements, household confidence has remained weak.
The central bank says that people’s perceptions are shaped by cumulative price increases rather than annual inflation rates alone.
Families compare today’s grocery bill with what they paid two or three years ago, not with last month’s inflation reading. They also pay attention to housing costs, wages, job security and their expectations for the future.
The report adds that media coverage, personal experiences and uncertainty about future income also play a role in shaping economic sentiment. Those factors can keep confidence depressed even when headline indicators improve.
Bank Al-Maghrib says this does not mean the official figures are misleading. Instead, it says that macroeconomic statistics and household perceptions measure different aspects of the economy and should be seen as complementary rather than contradictory.
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