National Economy: 5.5% Growth in the Second Quarter of 2025

This performance was accompanied by a more moderate improvement in the labor market, with paid employment rising by 1.4% year-on-year, compared to +3.4% in the first quarter, the HCP said in its economic outlook note for Q2-2025 and its projections for Q3 and Q4-2025.

Service and industrial firms have generally favored productivity gains over new hiring, in a context marked by slightly rising wage costs, particularly for employees earning the guaranteed minimum wage (SMIG).

The economic rebound also came with greater financing needs. Budget revenues increased, both in indirect taxes and corporate taxes, reflecting a broader tax base driven by the recovery in activity.

On the expenditure side, public sector wage spending grew sharply by 10.8%, contributing to a rise in the financing needs of public administrations.

Taking into account the growing financial requirements of businesses, particularly those linked to investment projects, the overall financing gap of the national economy widened to -3.2% of quarterly GDP, compared with -2% in the previous quarter.

According to the HCP, Morocco’s new growth cycle has now lasted for over six consecutive quarters, with non-agricultural activity expanding by an average of 4.8% year-on-year per quarter.

This expansion, which has fully bridged the output gap caused by the Covid-19 crisis, strengthened further in Q2-2025, reaching 5.5%, thanks to a broad-based recovery across all sectors.

The manufacturing and mining industries, as well as construction and hospitality, were particularly dynamic, accounting for nearly 40% of overall economic growth.

Economic acceleration was fueled by stronger-than-expected exports (+8.5%) and a robust rebound in domestic demand (+9.2%).

Consumer confidence improved, leading to a 5.1% rise in household spending, up from +4.4% in the previous quarter.

Investment recovery, on an upward trend since mid-2023, also strengthened. The financial environment remained favorable for equipment investment in Q2-2025, with lower borrowing costs and a continued decline in import prices of industrial capital goods.

Sustained domestic demand translated into a 15.7% increase in the volume of imports of goods and services during the quarter.

Meanwhile, improved terms of trade, resulting from divergent trends in export and import prices and the appreciation of the exchange rate, helped ease the external balance, mitigating its impact on economic expansion.

Editorial team/le7tv