Morocco’s Growth Holds at 4.6% as Agriculture Offsets Economic Pressures

The first quarter of 2026 confirms sustained economic momentum in Morocco. The upturn in agriculture is offsetting the decline in secondary activities. However, the widening trade deficit and the slowdown in investment raise concerns.

The national economy began the year at a brisk pace. According to provisional national accounts published by the High Commission for Planning (HCP) for the first quarter of 2026, the Gross Domestic Product (GDP) in volume, adjusted for seasonal variations, grew by 4.6%. This is a solid figure, even if it marks a slight slowdown compared to the 5% recorded a year earlier.

This performance stems from an apparent paradox: the non-agricultural sector, the usual engine of growth, saw its pace slow, falling from 4% to 2.6%. However, this decline was largely offset by an exceptional agricultural upturn, boosted by favorable weather conditions and a record-breaking cereal harvest.

Agriculture, the main driver of growth in Morocco

The value added of the primary sector in Morocco jumped 17.3% in the first quarter of 2026, compared to 7.7% a year earlier. Agricultural activity alone increased by 18.4% (compared to 8.1% in the first quarter of 2025).

This performance, explained by an exceptional harvest, helped support overall growth while other sectors slowed. Fishing, on the other hand, recorded a slight decline of 1.9%, compared to a decrease of 1% a year earlier. This is a sign that the risks to the primary sector remain, even in a generally favorable context.

The secondary sector is stalling

Conversely, the secondary sector in Morocco experienced a 1% contraction in its added value in the first quarter of 2026, after a 2.9% increase a year earlier. All components are declining. Electricity and water distribution fell by 3.4%, after a 0.1% increase in the first quarter of 2025. The mining industry dropped by 3.2%, compared to a 9.3% increase a year earlier. Manufacturing industries, the core of Morocco’s productive fabric, contracted by 1.3%, after a 1% increase.

The construction sector, which is experiencing growth of 1.5%, has slowed considerably compared to the 7.1% recorded in the first quarter of 2025. This decline in the secondary sector is all the more concerning as it occurs against a backdrop of major infrastructure projects that, in theory, should support activity. It likely reflects the effects of the global economic slowdown, pressures on energy prices, and difficulties in obtaining input supplies.

The service sector in Morocco is holding up, but slowing down

The service sector in Morocco, for its part, recorded growth of 4.3% in the first quarter of 2026, compared to 4.5% a year earlier. A slight slowdown, but one that masks significant disparities. Some activities are bucking the trend. Financial services and insurance grew by 7.6% (compared to 5.8% in the first quarter of 2025), driven by the dynamism of credit and financial markets.

Transportation and warehousing improved to 4.8% (compared to 4.1%), supported by the recovery in air and port traffic. Information and communication showed growth of 2%, after a decline of 1.7% a year earlier.

Conversely, several sectors in Morocco are slowing down. Accommodation and food services, which had benefited from the post-Covid momentum, fell from 8.7% to 8.1%. Education, health, and social services slowed to 6.3% (compared to 6.8%). Trade and repair of motor vehicles, a barometer of household consumption, declined to 4.1% (compared to 4.7%). Real estate services, weakened by rising interest rates, fell from 3% to 2.2%.

Household consumption, the engine of domestic demand

Domestic demand grew by 6.5% in the first quarter of 2026, compared to 6.4% a year earlier. Its contribution to growth amounted to 6.9 percentage points, compared to 5.3 percentage points a year earlier. Household final consumption expenditure in Morocco increased by 4.6%, compared to 1.1% in the first quarter of 2025.

This increase, which contributed 2.6 percentage points to growth (compared to 0.7 points a year earlier), can be explained by several factors: the improved agricultural sector, which is supporting rural incomes; inflation, which remained contained at 1.1%; and the measures implemented by the government to support purchasing power.

Final consumption expenditure by public administrations in Morocco, meanwhile, rose by 4.9% (compared to 3.5% a year earlier), contributing 0.9 percentage points to growth (compared to 0.6 points a year earlier). This increase reflects the rise in government operating expenses.

Investment slows, the trade deficit widens

Gross fixed capital formation (GFCF, changes in inventories, and net acquisitions of valuables) has slowed considerably. Its growth rate fell from 19.6% in the first quarter of 2025 to 10.8% a year later. Its contribution to growth dropped to 3.4 points, compared to 4 points a year earlier. This decline, which comes after several quarters of strong growth, could reflect the effects of geopolitical tensions and the rising cost of financing.

Major infrastructure projects in Morocco (Casa Sud train station, high-speed rail line, highways, projects related to the 2030 World Cup) continue to support public investment, but private investment appears to be losing momentum.

Externally, trade in goods and services is negatively impacting growth. Its contribution to growth reached -2.3 percentage points in the first quarter of 2026, compared to -0.3 percentage points a year earlier. Imports of goods and services in volume terms jumped by 12.7% (compared to 7.3% in the first quarter of 2025), with a negative contribution to growth of 6.1 percentage points, compared to a negative contribution of 3.5 percentage points a year earlier.

Exports, meanwhile, increased by 9.2% (compared to 7.9%), contributing 3.8 percentage points to growth, compared to 3.2 percentage points a year earlier. This widening trade deficit, which is not a new phenomenon, reflects Morocco’s structural dependence on imports, particularly energy and capital goods.

National savings are rising, but financing needs are increasing

With GDP rising by 5.7% at current prices and net income received from the rest of the world increasing by 23.8%, gross national disposable income in Morocco grew by 6.8% in the first quarter of 2026, compared to 5.9% a year earlier. National savings stood at 31.4% of GDP, compared to 29.5% a year earlier.

Gross investment represented 32.9% of GDP (compared to 30.7% in the first quarter of 2025). The economy’s financing needs reached 1.5% of GDP, compared to 1.2% a year earlier. This figure is still limited, but it shows that the gap between savings and investment is widening slightly.

Fragile Balances for Morocco’s economy

An analysis of the national accounts for the first quarter of 2026 paints a mixed picture. The national economy is holding up, supported by an exceptional agricultural upturn and dynamic household consumption. However, structural weaknesses persist in Morocco. The decline in the secondary sector, the widening trade deficit, and the slowdown in private investment are warning signs.

Agricultural performance, however spectacular, cannot alone sustain growth over the long term. And domestic demand, while currently robust, remains dependent on government measures to support purchasing power. In this context, the coming quarters will be crucial in confirming the resilience of the Moroccan economy in the face of international uncertainties and in initiating the structural reforms necessary to consolidate its growth.

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(Featured image by Kamil via Unsplash)

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First published in LES ECO.ma. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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