Morocco’s economy grows but household spending lags behind
Morocco’s gross domestic product surged by 4.9% in 2025, marking its strongest growth in nearly a decade. Yet this impressive headline figure masks a stark reality: while investment soared by 16.3%, household consumption barely inched up by 1.2%.
A closer look at the numbers reveals a lopsided recovery. Morocco’s economic rebound is being driven primarily by massive public infrastructure projects rather than broad-based improvements in household spending power. This trend underscores how growth remains heavily dependent on state-led initiatives rather than organic consumer demand.
Public investment powers ahead
Fixed capital formation jumped 16.3% last year, building on an already robust 14% increase in 2024. This extraordinary momentum stems largely from government-led megaprojects, particularly those tied to the 2030 FIFA World Cup preparations. Construction activity alone expanded by 6.7%, while private investment is gradually recovering from pandemic-era declines. Since 2020, public spending and capital formation have consistently outpaced overall GDP growth.
Government expenditures rose another 5.1% in 2025, fueled by expanded social protection programs, public sector wage increases, and enhanced service delivery across key sectors.
Household budgets feel the squeeze
The contrast with private consumption is striking. After growing 4.7% in 2023, household spending decelerated sharply to 3% in 2024 before plummeting to just 1.2% last year. The slowdown persists despite falling inflation—dropping to 0.8% in 2025—and early signs of improving consumer confidence. While families haven’t cut essential expenses, their spending simply isn’t keeping pace with the economy’s overall expansion or the rapid growth in investment.
This disparity highlights Morocco’s continued reliance on public sector-led growth models. The benefits of current economic dynamism haven’t yet translated into proportional gains for ordinary households.
What comes next for Morocco’s economy?
Projections suggest a gradual rebalancing may lie ahead. As the current wave of infrastructure projects approaches completion, economists anticipate private consumption could accelerate to 4.8% annually by 2028. Until then, Morocco’s economic engine will continue to rev at a pace that household budgets struggle to match.