Morocco faces MAD 50 billion energy import shock as AfDB warns of widening deficits

Morocco could face an additional MAD 40 billion to 50 billion in energy imports in 2026 as geopolitical tensions in the Middle East drive up fuel and commodity prices, the African Development Bank (AfDB) warned in a new assessment, raising concerns over the country’s trade deficit, public finances and household purchasing power.

The potential increase, equivalent to 2.5% to 3% of GDP, comes as Morocco faces a simultaneous surge in energy costs and declining phosphate export revenues, placing additional pressure on two major components of its external accounts.

In its assessment of the third phase of Morocco’s Economic Governance and Climate Resilience Support Programme, reviewed by Hespress, the AfDB estimated that every $10 increase in global oil prices costs the Moroccan economy approximately MAD 15 billion.

Oil and gas imports rose 29.1% to MAD 18.2 billion above their previous level by the end of July, while sulfur imports reached MAD 20.2 billion, an increase of MAD 7.8 billion.

The combined pressures contributed to a 26.5% widening of Morocco’s trade deficit to MAD 244.7 billion, with exports covering just 55% of imports.

The bank warned that the trade deficit could reach 21.9% of GDP by year-end, while the current account deficit could widen to 3.7%, compared with an initial projection of 2.1%.

The government allocated an emergency MAD 20 billion package in May to contain rising energy costs, including subsidies for butane gas, electricity and transport operators.

Butane subsidies alone reached MAD 12.9 billion by August, approaching the full-year allocation of MAD 13.77 billion. The state now covers up to MAD 78 per 12-kilogram cylinder to maintain the retail price at MAD 50.

Meanwhile, sulfur prices surged from approximately $150 per tonne in early 2025 to more than $900 in September 2026, raising production costs for Morocco’s phosphate industry.

Phosphate and derivative exports fell 7.8% to MAD 50.95 billion by July, weakening a major source of foreign currency.

Against this backdrop, the AfDB lowered its 2026 growth forecast from 5.2% to 4.8%, warning that persistent energy costs and weaker European demand could further constrain economic activity.