Current Political Landscape and International Relations
Morocco continues to maintain a medium overall country risk rating, a status that reflects the prevailing geopolitical uncertainties stemming from the ongoing conflict in Iran. Prime Minister Aziz Akhannouch has made the significant decision not to pursue re-election in the forthcoming 2026 elections, leading to speculation that the National Rally of Independents (RNI) will likely nominate Mohamed Chouki as its next leader. The political climate in Morocco is characterized by medium to high levels of political violence and medium levels of political interference. Nevertheless, there is a general expectation that the coalition government will retain its position in the upcoming electoral process. In a notable development, Morocco has strengthened its cooperation with Spain, particularly in efforts to curb illegal migration attempts heading into Europe. Despite the tightening of migration routes, there was a reported decrease of 6.4% in illegal migrant attempts in the previous year.
On the regional front, relations with Algeria remain strained, especially after Mali expressed support for Morocco’s autonomy proposal regarding Western Sahara. This plan envisions a local legislative, executive, and judicial authority for residents while allowing Morocco to maintain control over defense and foreign affairs. The Polisario Front, which is heavily supported by Algeria, continues to advocate for a referendum that includes the option of independence. Conversely, Morocco's relations with European nations, particularly France and Spain, have significantly improved as both countries have voiced their backing for Morocco's autonomy initiative concerning Western Sahara. Furthermore, Morocco’s partnership with the United States has been reinforced, particularly after Morocco became the first African nation to sign President Trump's 'Board of Peace' charter in early 2026. The legal and regulatory risk in Morocco is currently assessed as medium-high.
Economic Outlook and Growth Projections
According to the International Monetary Fund (IMF), Morocco’s GDP growth is projected to remain robust at 4.9% in 2026, with a slight easing to 4.5% in 2027. This growth trajectory is bolstered by a recovery in agricultural output, which had previously been hindered by drought conditions, coupled with a significant increase in large-scale infrastructure projects and tourism activities. A noteworthy project on the horizon is the USD 25 billion Nigeria-Morocco gas pipeline, which is anticipated to be signed this year. This pipeline will not only enhance Morocco’s gas supply but also facilitate exports to mainland Europe. However, the overall growth outlook faces challenges, primarily due to the ongoing conflict in the Middle East, which is expected to suppress global demand and lead to a temporary uptick in inflation, largely influenced by rising energy prices. The IMF forecasts that inflation will stabilize at around 2% over the medium term, as Morocco's central bank maintains its policy rate at 2.25% following its latest meeting. Consequently, the risk associated with conducting business in Morocco is evaluated as medium-low, while the government's capacity to provide economic stimulus is rated at medium. Sovereign non-payment risk remains a concern, classified as medium-high, largely due to the country's elevated debt-to-GDP ratio. Nevertheless, there are indicators of a gradual decline in this ratio, with the IMF predicting a reduction to 60.5% by 2031.
As reported by continuumeconomics.com.
