World Bank Predicts Morocco's Economy to Grow by 4.4% in 2026 Amid Regional Challenges

Growth Projections Amid Regional Setbacks

A recent report from the World Bank has forecasted that Morocco's economy will experience a growth rate of 4.4% in 2026, reflecting a modest upward revision of 0.2 percentage points compared to the projections made in April. This optimistic outlook for Morocco contrasts sharply with a bleak forecast for the broader Middle East, North Africa, Afghanistan, and Pakistan (MENAAP) region, which is expected to shrink by 2.1%. This downturn is attributed primarily to the conflict that erupted in the Middle East in February and the effective closure of the Straits of Hormuz.

The projections, detailed in the latest economic update for the region titled “Bridging Gaps and Seizing Opportunities: Artificial Intelligence, Jobs, and Growth,” suggest that Morocco's growth will decelerate from 4.9% in 2025 to 4.4% in 2026, and further down to 4% in 2027. While the latter figure has remained unchanged since April, it is 0.4 points lower than the January forecasts, with the 2025 growth still estimated at 4.9%.

This adjustment in Morocco's growth expectations runs counter to a regional trend, as the World Bank has downgraded its forecasts for the region by 2.4 points since January. The losses in output are primarily linked to oil and gas-exporting nations that have been adversely affected by the closure of the Straits of Hormuz, with countries like Qatar expected to witness a staggering economic contraction of 20.9%.

Factors Contributing to Economic Slowdown

The international financial institution attributes the anticipated slowdown in Morocco's economy to the fading effects of previous agricultural gains and rising energy costs. However, the report acknowledges that Morocco enters 2026 with considerable momentum, bolstered by favorable rainfall, ongoing public investment in infrastructure, a resilient tourism sector, and robust export activity.

This projected growth rate remains slightly above the average of 4.3% anticipated for oil-importing developing nations in the region, which the report suggests have managed to maintain relative stability amid the challenging environment. Furthermore, the report indicates an anticipated inflation rate of 1.2% in 2026 and 1.8% in 2027, following a lower rate of 0.8% in 2025.

Moreover, the “current account deficit” is expected to widen from 2.1% of GDP in 2025 to 3.6% in 2026 before narrowing to 2.4% in 2027. The budget deficit is projected to remain stable at 3.5% in 2026, with a slight reduction to 3.3% in 2027. However, the report does not shy away from highlighting the risks involved, classifying Morocco among oil-importing countries that are vulnerable to inflationary pressures, financial contraction, and rising borrowing costs, as well as categorizing it among economies facing significant debt or financing pressures.

In a positive note, it is observed that the yield spreads on Moroccan sovereign bonds were below pre-conflict levels as of early September. However, the document warns of the anticipated strong “El Niño” phenomenon later in 2026, noting that approximately 28% of Morocco's population resides in areas likely to experience exceptionally high seasonal temperatures between October and December.

The second chapter of the report focuses on artificial intelligence, positioning Morocco as one of the middle-income economies that combine technical talent with emerging digital systems, albeit with significant readiness gaps. Alongside Tunisia, Morocco is identified as a key exporter of AI-related products in the region, with high-tech products constituting about 5% of Morocco's manufactured exports, compared to over 7% in Tunisia and an average of 3.5% among oil-importing nations.

The report also highlights Morocco and Egypt as countries striving to establish themselves as regional AI hubs, particularly noting the $1.2 billion “Nexus AI Factory” project that is powered entirely by renewable energy. In a survey conducted by the World Bank in Morocco in 2024, it was found that nearly all companies utilize basic digital tools, with one-third adopting advanced software; however, less than half of these firms use them intensively. Only 4.3% of firms have implemented big data analytics or AI, while 40% use cloud computing, with costs identified as the main barrier.

On the regulatory front, the report points to the absence of specific legislation governing AI as a substantial obstacle to its adoption in Morocco. Nonetheless, Morocco outperforms Tunisia, the West Bank, and Gaza in terms of national statistical capacity and exceeds the expected use of AI tools relative to its income level.

In the labor market, the report notes that the proportion of AI-specialized engineers among LinkedIn members in Morocco has more than tripled between 2016 and 2024. However, it also reports a net loss of these skilled professionals in 2024 to countries like the Gulf states, France, the UK, and the US. The share of job postings requiring digital skills in Morocco has dropped by about 15 percentage points from 2021 to 2025, a notable exception in the region. At a regional level, the report estimates that AI threatens less than 10% of jobs while having the potential to enhance productivity by 13% to 20%.

As reported by hespress.com.