Morocco’s growth model continues to face structural weaknesses that limit its ability to generate sustainable, inclusive, and regionally balanced growth, despite progress in maintaining macroeconomic stability, according to the Economic, Social and Environmental Council (CESE).
In its 2025 annual report submitted to King Mohammed VI, the council called for reforms to distribution and marketing channels to reduce rent-seeking practices “to the lowest possible level.”
CESE said the economy’s limitations are reflected in three interconnected challenges: weak job creation, a highly fragmented productive sector, and persistent regional disparities.
The council noted that economic growth is generating fewer jobs than in previous years, highlighting what it described as a growing disconnect between economic expansion and labor market performance.
It attributed this trend partly to a gradual shift in investment and growth toward capital-intensive sectors or industries with limited employment potential, while traditionally labor-intensive sectors, such as textiles and clothing, continue to lose ground.
According to the report, Morocco recorded cumulative gross fixed capital formation of approximately MAD 1.704 trillion between 2021 and 2025, while creating only around 400,000 net jobs over the same period.
CESE also said Morocco’s productive fabric remains highly fragmented and consists of three main components with differing levels of productivity, development potential, and operating models. It added that the informal sector continues to play a significant role in the national economy.
Purchasing power remains under pressure
Although inflation slowed sharply in 2025 to 0.8%, CESE stressed that prices remain significantly higher than they were in 2021.
Overall consumer prices are still more than 15% above 2021 levels, while food prices have risen by nearly 27%, continuing to erode household purchasing power despite government measures aimed at easing the burden.
The council recommended strengthening policies that protect purchasing power, accelerating reforms to distribution and marketing channels to curb rent-seeking practices, reinforcing measures against anti-competitive behavior, and tightening oversight of public subsidies to ensure they effectively benefit households.
Public finances improve, but risks remain
CESE welcomed the continued strengthening of Morocco’s public finances in 2025, noting that the budget deficit narrowed to 3.5% of gross domestic product, down from 3.8% in 2024.
The improvement was supported by stronger tax revenues, driven in part by tax settlement operations and more effective collection efforts.
However, the council cautioned that these gains remain partly dependent on non-recurring sources of revenue, underscoring the need to preserve fiscal sustainability as Morocco continues to finance major strategic projects and faces growing funding needs.
2030 projects seen as strategic opportunity
CESE described Morocco’s major infrastructure projects planned through 2030 as a strategic opportunity to accelerate economic development.
The report said these projects, backed by investment equivalent to about 11.9% of GDP between 2024 and 2030, are expected to provide sustained support to economic activity, particularly in construction, tourism, transport, logistics, and urban services.
Beyond their short-term economic impact, the council said the projects would help modernize infrastructure, strengthen regional connectivity, and enhance Morocco’s international competitiveness and attractiveness.
However, CESE stressed that achieving these objectives will require maximizing the long-term economic benefits while managing associated risks.
The council called for safeguarding public finances, improving private-sector access to financing, increasing local content in strategic projects, and strengthening the integration of Moroccan companies, particularly micro, small, and medium-sized enterprises, into national value chains.
It also emphasized the importance of ensuring that the projects create sustainable, skilled jobs and avoiding factors that could diminish their long-term economic and social impact, including the risk of persistently high consumer prices after Morocco’s international events conclude.
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