Morocco’s Economy

Economic Overview

Morocco has one of the most diversified and resilient economies in Africa. Unlike many regional peers that depend heavily on a single commodity, Morocco draws strength from agriculture, manufacturing, services, tourism and mining. The country's real GDP growth reached 3.8% in 2024, demonstrating remarkable resilience despite challenges from persistent drought conditions that impacted agricultural output. Non-agricultural sectors expanded robustly at 3.8%, driven by strong performance in manufacturing, construction, and services. Looking ahead, economic growth is projected to maintain momentum at 3.8-4.1% in 2025 and 3.8% in 2026, supported by resilient domestic demand and the continued expansion of tourism and industrial sectors.

With a nominal GDP of approximately $144 billion (2023) and a population of 36.8 million people, Morocco offers a substantial domestic market. The economy is characterized by low inflation (1.0% in 2024), controlled monetary policy (2.50% policy rate), and increasingly favorable business conditions. Urbanization is accelerating rapidly, with Casablanca and Rabat serving as major commercial and financial hubs, while cities like Tangier and Agadir emerge as important industrial and tourism centers.

Strategic Location & Market Access

Morocco's geographical position at the crossroads of Europe, Africa, and the Middle East provides unparalleled strategic advantages. Located at the meeting point of the Mediterranean and Atlantic oceans, just 14 kilometers from Europe via the Strait of Gibraltar, Morocco serves as a natural gateway to multiple major markets. The country belongs to the African Union and the Arab League, while maintaining extensive free trade agreements with 62 countries covering key markets worldwide.

The European Union is Morocco's dominant trading partner, accounting for 59% of total goods trade in 2024. Bilateral EU-Morocco trade reached €60.6 billion, with Morocco exporting primarily transport equipment (28%), machinery and appliances (24.6%), vegetable products (11.8%), and textiles (11.6%). The landmark US-Morocco Free Trade Agreement, in force since 2006, has transformed bilateral trade relations. US exports to Morocco surged to $5.3 billion in 2024 (up 37.3% year-over-year), while Morocco's exports to the US reached $1.9 billion, creating a $3.4 billion trade surplus for the United States—a dramatic increase from just $35 million before the agreement.

Key Economic Sectors

Agriculture & Food Production

Agriculture employs approximately 30% of Morocco's workforce and produces cereals, citrus fruits, olives, vegetables, and a wide variety of export crops. The sector faced headwinds in 2024, with agricultural output declining 4.8% due to severe drought conditions. However, improved climatic forecasts point to a strong recovery, with agricultural GDP projected to expand 4.5% in 2025. The government's Green Morocco Plan continues to modernize irrigation systems, encourage mechanization, improve water management, and diversify crops to build climate resilience. These investments are critical as Morocco positions itself as a major agricultural exporter to European and African markets.

Manufacturing & Industry

Morocco has successfully transformed into a competitive manufacturing hub, particularly in automotive and aerospace sectors. The country is among the top car exporters to the European Union, with production exceeding 500,000 vehicles in 2023 and export growth of 6.3% in 2024. Major automakers including Renault, Stellantis, and their extensive supplier networks have established world-class production facilities in Tangier and Kenitra. The aerospace sector demonstrated exceptional performance with exports surging 14.9% in 2024, as Morocco supplies components to Airbus, Boeing, and other major aircraft manufacturers. Textiles, food processing, and electronics manufacturing also contribute significantly to industrial output, benefiting from industrial free zones, skilled labor, competitive costs, and proximity to European markets.

Services & Tourism

The services sector accounts for over half of Morocco's GDP and continues to expand rapidly. Financial services and insurance grew 7.3% in 2024, while transport and storage expanded 7.4%. The tourism sector has experienced remarkable growth, reaching a record 4 million visitors in just the first quarter of 2025. Morocco's historic cities—including Marrakesh, Fez, Casablanca, and Rabat—combined with coastal resorts, Sahara destinations, and rich cultural heritage attract visitors from Europe, the Middle East, and increasingly from Asia and North America. Telecommunications, logistics, and professional services also contribute substantially to economic growth and employment.

Mining & Phosphates

Morocco holds approximately 70% of the world's phosphate reserves and is the world's largest exporter of phosphates and phosphate derivatives. The mining sector, particularly phosphates, provides substantial export revenue and foreign exchange. In 2024, exports of phosphates and derivatives increased 13.1%, despite global commodity price fluctuations. Morocco is also developing its mining sector beyond phosphates, including exploration and production of silver, copper, zinc, and other minerals.

Renewable Energy

Morocco has set ambitious renewable energy targets, aiming for 52% of electricity generation from renewable sources by 2030. The country has invested heavily in solar and wind megaprojects, including the world-renowned Noor Ouarzazate concentrated solar power complex, along with major wind farms in Tarfaya and Midelt. These initiatives position Morocco as a regional leader in green energy and a potential exporter of clean electricity to Europe. Emerging opportunities in green hydrogen production are attracting significant foreign direct investment.

Employment & Labor Market

Morocco's labor market presents both opportunities and challenges. The overall unemployment rate stood at 8.9% for full-year 2024, with quarterly variations ranging from 12.8% to 13.6%. Youth unemployment remains a significant concern at approximately 36.7% for the 15-24 age group, highlighting the need for continued focus on job creation, skills development, and entrepreneurship support. The government is implementing various initiatives to improve workforce skills, promote vocational training, and create employment opportunities in high-growth sectors.

Trade Performance

In 2024, Morocco's trade deficit increased 7.3% to 306.47 billion dirhams, driven by strong import growth of 6.4% (reaching 761.45 billion dirhams) and export growth of 5.8% (totaling 454.97 billion dirhams). Export growth was led by the aerospace sector (14.9%), phosphates and derivatives (13.1%), automotive industry (6.3%), and agriculture/agri-food sector (3.1%). Spain and France remain Morocco's top trading partners, followed by India, Italy, Brazil for exports, and China, United States, and Saudi Arabia for imports.

Investment & Business Climate

Foreign direct investment has remained robust, particularly in sectors such as green hydrogen, electric vehicle battery components, renewable energy, and advanced manufacturing. The government's investment charter provides attractive incentives including tax breaks, streamlined procedures, and access to world-class industrial zones. Both domestic investment and FDI are projected to remain strong, supporting expansion in manufacturing, tourism, construction, and technology sectors. Economic reforms focus on improving the business climate, reducing bureaucracy, fighting corruption, expanding digital government services, and promoting financial inclusion.

Infrastructure Development

Morocco boasts modern infrastructure including world-class ports (Tangier Med, Casablanca), international airports, extensive highway networks, and Africa's first high-speed rail line (Al Boraq connecting Tangier and Casablanca). Continued investments in ports, logistics zones, rail connections, and digital infrastructure enhance Morocco's competitiveness as a regional trade and manufacturing hub.

Future Outlook

Morocco's economic prospects remain positive, supported by structural reforms, diversified export base, strategic location, political stability, and strong international partnerships. The country is well-positioned to serve as a gateway for African markets while deepening integration with European and global value chains. Key priorities include addressing youth unemployment, enhancing education and skills development, accelerating digital transformation, strengthening climate resilience, and leveraging opportunities in renewable energy and advanced manufacturing. With prudent macroeconomic management and continued reform momentum, Morocco is on track to become one of Africa's leading economic powerhouses.