Morocco's new government is set to face significant economic challenges as it navigates a complex equation of maintaining growth momentum while making it more inclusive and equitable. The country's economy has shown resilience, with the World Bank forecasting 4.9% growth in 2025 and 4.2% in 2026, driven by investment and domestic demand. However, the government must address structural issues, including high unemployment, particularly among youth.
The new government's ability to translate campaign promises into actionable policies will be tested, particularly in addressing unemployment. Morocco's unemployment rate stood at 9.5% in the second quarter of 2026, with significant disparities between urban and rural areas, as well as between genders. The youth unemployment rate remains high, at 27.2% for those aged 15-24. The government must prioritize job creation, especially for young people, and promote sustainable employment.
The government's economic strategy will focus on promoting private sector growth, particularly among small and medium-sized enterprises (SMEs). The International Monetary Fund (IMF) has emphasized the need for a more dynamic private sector to drive job creation and economic growth. Morocco's economic growth has been largely driven by public investment, but the government aims to shift towards a more balanced model that leverages private sector potential.
The government's fiscal policy will also be critical in addressing economic challenges. The budget deficit is expected to decline to 3.2% of GDP by 2027, while public debt is projected to decrease to 60.5% of GDP by 2031. However, the government must balance fiscal consolidation with social and investment spending, particularly in areas such as water, energy, and transportation.
Inflation has decreased significantly, averaging 0.8% in 2025, but the government remains cautious about potential price pressures. The ongoing conflict in the Middle East and disruptions to global supply chains pose risks to Morocco's economy, which is heavily reliant on imported goods.
The government's investment strategy will focus on promoting sustainable and inclusive growth. While large-scale projects have driven economic growth, the government aims to increase the contribution of the private sector and SMEs to job creation and economic growth. The IMF has emphasized the need for Morocco to improve its business environment and enhance competitiveness.
Ultimately, the success of Morocco's new government will depend on its ability to make economic growth more tangible and inclusive for its citizens. The government must prioritize job creation, promote private sector growth, and address social and regional disparities. By doing so, it can ensure that economic growth benefits all Moroccans and improves their living standards.
Key points
- Morocco's new government must prioritize job creation and promote private sector growth to address economic challenges.
- The government must balance fiscal consolidation with social and investment spending to ensure sustainable and inclusive growth.
- Morocco's economic growth must be more inclusive and equitable, with a focus on reducing social and regional disparities.
