Morocco's economic growth slowed to 4% in the second quarter, down from 5.8% in the same period last year. The slowdown was driven by a decline in non-agricultural activities, which account for most of the country's gross domestic product. In contrast, the agricultural sector saw a significant increase in value added, driven by a favorable cereal campaign. The sector grew by 21.2%, compared to 8.3% in Q2 2025.
The slowdown in non-agricultural activities was driven by a decline in the secondary sector, which contracted by 3.9% compared to a 5.8% growth in the same period last year. The extractive industries sector saw a significant decline of 28.6%, compared to a 13.7% growth in Q2 2025. The manufacturing sector also declined, by 3.2%, compared to a 4.3% growth in the same period last year.
The building and services related to energy and water sectors continued to grow, but at a slower pace. The decline in extractive industries was the most significant factor in the slowdown, driven by the phosphate and mining industries, which are affected by international market trends. The prices and volumes of these industries depend on global markets, which are currently experiencing an increase in input costs, particularly sulfur.
Despite the slowdown, the growth was still driven by domestic demand in a context of controlled inflation. However, the High Commission for Planning noted an increase in the economy's financing needs, which is the gap between available savings and investment. This gap was filled by resorting to external financing.
The economic growth figures set the framework for the government's budget planning, including the draft finance bill for 2027. The bill assumes a growth rate of 4.1% and a deficit of 3% of GDP. The government will need to make decisions on budget allocations in the context of a slowing economy and increasing financing needs.
The slowdown in economic growth highlights the challenges facing Morocco's economy, including the impact of global market trends on key sectors. The government's budget planning will need to take into account the need to support economic growth while managing the country's finances.
The next steps for the government will be to finalize the budget and implement policies to support economic growth. The country's economic growth prospects will depend on various factors, including global market trends and the government's policy decisions.
Key points
- Morocco's economic growth slowed to 4% in Q2, driven by a decline in non-agricultural activities.
- The agricultural sector saw a significant increase in value added, driven by a favorable cereal campaign.
- The government's budget planning will need to take into account the need to support economic growth while managing the country's finances.
