Morocco Growth Seen at 4.5%, Deficit Doubles

Economic growth measures how quickly a country’s output expands. The IMF expects Morocco’s economy to grow strongly, but at a slowing pace: 4.5% in 2026, down from 4.9% in 2025, and 4.2% in 2027. This matters because growth supports jobs, business activity and demand for imports.

Morocco’s performance remains stronger than the global outlook. The IMF forecasts world growth of 3.1% in 2026 and 3.4% in 2027. Morocco would therefore keep outpacing the world economy, even as its own growth rate eases.

Other forecasts show a mixed picture. Inflation is expected to remain very low, at 0.9% in 2026 and 1.4% in 2027. Unemployment is also projected to fall, from 13% in 2025 to 12.2% in 2026 and 11.3% in 2027. However, the wider external deficit creates financial exposure.

The current account records a country’s economic transactions with the rest of the world. It includes goods, services, income and transfers. A deficit occurs when payments flowing abroad exceed receipts coming in. In everyday terms, the country is spending more overseas than it earns from these external activities.

For Morocco, imports are a major part of the picture. The kingdom buys most of its energy from overseas, and it is also purchasing more equipment for large investment projects. Those payments increase the country’s foreign funding needs. Exports, tourism receipts and remittances provide income that offsets some of the outflow.

A deficit is not automatically a crisis. Foreign investment and borrowing abroad can finance it. But a larger gap can put more pressure on the dirham, reserves and external borrowing. Morocco’s projected deficit rises sharply in 2026, making those funding sources more important.

The current-account deficit measures the shortfall between Morocco’s external receipts and payments. The IMF expects it to reach 4.9% of GDP in 2026. Using the Fund’s estimated US$195.6 billion economy, that equals about US$9.6 billion.

The change is large. The deficit was 2.4% of GDP in 2025, so the forecast rises by 2.5 percentage points. In proportional terms, the deficit is more than twice as large as last year’s. The widening reflects higher energy costs and stronger equipment imports.

The IMF’s figure is close to Bank Al-Maghrib’s projection of 4.6% of GDP for 2026. Both institutions expect the gap to narrow in 2027, but the outcome depends partly on energy import costs. Foreign investment, overseas Treasury borrowing and reserves are expected to cover the shortfall for now.

Morocco’s external deficit is widening because the country is paying more for imported energy and investment goods. Bank Al-Maghrib expects the energy import bill to rise 28.4% this year, reaching 138.1 billion dirhams, or about US$14 billion. Equipment-goods purchases are also forecast to increase 15.6% as major projects continue.

Some flows work in the opposite direction. Sales of phosphates and derived fertilisers are expected to rise 9.7% on high fertiliser prices. Tourism receipts and money sent home by Moroccans living abroad are also expected to keep increasing. These earnings bring foreign money into the country.

The support is only partial because the energy and equipment bills are growing faster than the offsetting inflows. That leaves the current-account deficit near 4.9% of GDP in the IMF forecast for 2026. If energy costs ease, the gap could narrow in 2027, as both institutions expect.

A country can pay for a current-account deficit by attracting foreign investment, borrowing from overseas or using foreign-exchange reserves. These channels supply the foreign currency needed to settle import bills and other external payments. They prevent a wider deficit from immediately becoming a funding crisis.

Morocco expects foreign direct investment and Treasury borrowing abroad to cover its projected shortfall. Reserves provide an additional buffer. Bank Al-Maghrib forecasts official reserves of 502.8 billion dirhams, about US$51 billion, by the end of 2026. That is a substantial cushion against external payments pressure.

The reserve forecast rises to 515.3 billion dirhams, or about US$52 billion, by end-2027. The central bank says this would cover roughly five and a half months of goods and services imports. The cushion does not remove risk, however. Investors will watch whether financing remains available and whether the deficit narrows.

A wide current-account deficit means Morocco needs more foreign money. If financing becomes harder to attract, pressure can build on the dirham. A weaker currency makes imported goods and energy more expensive in local-currency terms, potentially raising costs for households and businesses. The central bank already projects a 4.1% fall in the dirham’s real effective exchange rate this year.

Energy prices are especially important because Morocco buys most of its energy overseas. Bank Al-Maghrib expects the energy import bill to rise 28.4% this year. A further increase would enlarge the external gap unless exports, tourism or remittances offset it.

Foreign bond investors would monitor reserves, overseas borrowing and the deficit’s direction. A wider gap can mean greater external-financing exposure. The IMF and central bank expect the deficit to narrow in 2027, which would reduce pressure if energy costs fall enough.

Deficits and surpluses are often expressed as percentages of GDP because raw amounts can mislead. A US$10 billion deficit is much more burdensome for a small economy than for a large one. GDP measures the total value of an economy’s output, so dividing the external balance by GDP relates the obligation to the country’s economic size.

Morocco’s 2026 current-account deficit illustrates this. The IMF estimates the deficit at 4.9% of GDP, equal to about US$9.6 billion against a US$195.6 billion economy. The percentage shows the deficit’s scale relative to Morocco’s ability to generate economic activity and income.

The ratio also makes comparisons easier over time and between countries. Morocco’s deficit rises from 2.4% of GDP in 2025 to 4.9% in 2026. That signals a much larger external imbalance, even before considering the exact dollar amount.