World Bank's Revised Economic Outlook for Morocco
The World Bank has revised its growth forecast for Morocco, projecting an increase to 4.4% by 2026, which is an improvement of 0.2 percentage points from the estimates released in April. This optimistic outlook comes despite anticipated slowdowns in growth over the next two years, primarily due to rising energy costs and a decrease in the benefits of previous agricultural gains. In contrast, the World Bank foresees a regional contraction in the economies of the Middle East, North Africa, Afghanistan, and Pakistan, expecting a decline of 2.1% in 2026, largely influenced by geopolitical tensions that escalated in February and the closure of the Strait of Hormuz.
In its latest report titled "Bridging Gaps and Seizing Opportunities: Artificial Intelligence, Jobs, and Growth," the World Bank indicated that Morocco's economy had grown by 4.9% in 2025, but this growth is expected to decelerate to 4.4% in 2026 and further to 4% in 2027. While the Bank has maintained its growth forecasts for 2027 unchanged from its April estimates, they represent a reduction of 0.4 percentage points from the predictions made in January. These relatively positive forecasts for Morocco come at a time when the World Bank has cut its growth estimates for the region by 2.4 percentage points compared to January, particularly impacting oil and gas-exporting countries affected by the Strait of Hormuz's closure, including Qatar, whose economy is expected to contract by 20.9% this year.
Factors Impacting Growth and Inflation
The anticipated slowdown in Morocco's economic growth has been attributed to the diminishing impact of earlier agricultural gains and increasing energy costs. However, the country is entering 2026 with strong economic momentum, bolstered by good rainfall, ongoing government investment in infrastructure, resilience in the tourism sector, and robust export activity. Despite the expected slowdown, Morocco's economic growth is likely to surpass the average anticipated growth for oil-importing developing countries in the region, which stands at 4.3% for 2026.
The World Bank's estimates also highlight a rise in Morocco's inflation rate to 1.2% in 2026 compared to 0.8% in 2025, with a further increase to 1.8% projected for 2027. In contrast, the current account deficit is expected to widen to 3.6% of GDP in 2026, up from 2.1% in 2025, before narrowing to 2.4% in 2027. The fiscal deficit is anticipated to stabilize at 3.5% of GDP in 2026, subsequently decreasing to 3.3% in 2027. The report warns of increasing pressures on Morocco due to inflation, diminishing fiscal space for government spending, and rising borrowing costs amid challenges related to debt and financing. It is crucial to note that the premiums on Moroccan sovereign bonds were below pre-conflict levels in the Middle East as of early September.
Moreover, climate risks associated with the anticipated strong "El Niño" phenomenon in late 2026 pose additional threats, especially considering that 28% of Morocco's population resides in regions likely to experience extreme seasonal temperatures between October and December.
In a different vein, the report discusses the opportunities presented by artificial intelligence (AI) in bolstering economic growth and job creation, placing Morocco among the middle-income economies that possess developing technical capabilities and digital systems, although still facing readiness gaps. The World Bank identified Morocco and Tunisia as leading exporters of AI-related products in the region, noting that high-tech products account for about 5% of Morocco's manufactured exports, compared to over 7% in Tunisia and an average of 3.5% in other oil-importing developing countries.
Furthermore, the report highlights Morocco and Egypt's aspirations to become regional AI hubs, referencing the "Nexus AI Factory" project, which has a budget of $1.2 billion and relies entirely on renewable energy. However, a survey conducted by the World Bank in 2024 indicates that while nearly all companies in Morocco utilize basic digital tools, only about one-third have adopted advanced software, and less than half of those employing such software do so intensively. The adoption rate for big data analytics or AI technologies remains low at 4.3%, while cloud computing is utilized by 40% of businesses. The report points out that cost remains the primary barrier to adopting these technologies.
The World Bank also noted that Morocco's national AI strategy faces challenges due to the lack of specific legislation governing this technology. Nonetheless, Morocco, along with Tunisia and the West Bank and Gaza Strip, has outperformed similar economies in terms of national statistical capabilities, exceeding the expected use of AI tools for an economy of its size. As for the labor market, the report revealed that the share of AI-specialized engineers on LinkedIn in Morocco has more than tripled between 2016 and 2024. However, there was a net loss of these skilled professionals in 2024, with many migrating to Gulf countries, France, Britain, and the United States. Additionally, the proportion of job advertisements requiring digital skills in Morocco dropped by about 15 percentage points between 2021 and 2025, a trend described as exceptional compared to other countries in the region.
On a regional scale, the World Bank estimates that AI poses a threat to less than 10% of jobs, yet it could enhance productivity by between 13% and 20%, underscoring the importance of developing digital skills and enhancing economies' readiness to leverage this technology.
As reported by cnnbusinessarabic.com.
