Morocco's economic growth slowed to 4% in the second quarter of 2026, down from 5.8% in the same period last year, according to the National Institute of Statistics. The agricultural sector was the main driver of growth, with a 21.2% increase in value added, while the non-agricultural sector grew at a slower pace of 1.5%. The slowdown in economic growth was attributed to a decline in the industrial sector, which contracted by 3.9%.
The industrial sector's decline was led by a 28.6% drop in the extractive industries and a 3.2% decline in manufacturing. The construction sector also slowed down, with a growth rate of 2.8%, down from 7.6% in the same period last year. On the other hand, the services sector maintained a relatively high growth rate of 4%, driven by a 7.7% increase in financial services and a 6.4% increase in education, health, and social services.
The growth in the agricultural sector was driven by a 21.2% increase in value added, while the fishing sector grew by 15.9%. The strong performance of the agricultural sector was attributed to favorable weather conditions and a good harvest. However, the industrial sector's decline was a major drag on growth, with the manufacturing sector contracting by 3.2%.
Domestic demand was the main driver of growth, with a 5% increase, contributing 5.6 points to economic growth. Household consumption was a key driver of domestic demand, with a 4.1% increase, while government consumption grew by 4.6%. However, investment growth slowed down to 6.8%, down from 20.3% in the same period last year.
The external sector also contributed to growth, with exports of goods and services increasing by 7.6%. However, imports grew at a faster pace of 9.1%, resulting in a negative contribution to growth. The current account deficit is expected to widen, driven by a higher import bill.
Inflation remained low, with a 0.4% increase in the general price level. However, the savings rate declined to 30.6% of GDP, down from 31.1% in the same period last year. The investment rate increased to 35.6% of GDP, up from 33.5%.
The economy's need for financing increased to 5% of GDP, up from 2.4% in the same period last year. The slowdown in economic growth and the decline in the industrial sector are major concerns for policymakers. The government will need to implement measures to boost investment and stimulate economic growth.
Key points
- Morocco's economic growth slowed to 4% in Q2 2026, driven by a strong agricultural sector, but industry contracted by 3.9%.
- The industrial sector's decline was led by a 28.6% drop in the extractive industries and a 3.2% decline in manufacturing.
- The economy's need for financing increased to 5% of GDP, up from 2.4% in the same period last year.
