The projections follow growth of 4% in the second quarter, down from 4.6% in the first three months of the year. The HCP expects agriculture and services to sustain economic activity and help cushion the impact of higher energy costs. Domestic demand should remain a key driver, supported by favorable monetary conditions and inflation below 2%.
The war in Iran, which broke out in late February 2026, triggered a new geopolitical crisis and pushed international energy commodity prices back toward levels last seen in 2022, the HCP said.
The shock reached Morocco mainly through higher energy and mineral input costs, weighing on secondary activities, whose value added fell by 3.9% in the second quarter. Growth in the primary sector, which rose 20.9%, and services, up 4%, helped offset the decline and support overall GDP growth.
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Domestic demand absorbed the shock unevenly. Gross fixed capital formation growth slowed to 6.8% in the second quarter, from 10.8% in the first, as higher production costs squeezed business profitability and housing demand weakened.
Household consumption, by contrast, continued to expand, rising 4.1%. The increase was supported by a 4% improvement in employment income and stronger borrowing. Outstanding household loans grew by 4.5% at the end of June 2026, compared with 3.9% at the end of March.
Meanwhile, the economy’s financing requirement climbed to 22 billion dirhams in the second quarter, up from 10.3 billion dirhams in the same period of 2025. The HCP attributed the increase to a wider trade deficit, driven partly by the energy bill and deteriorating terms of trade, as well as a larger budget deficit under pressure from support measures and continued public investment.
Agriculture and services to sustain growth in Q3
The HCP expects Morocco’s economy to grow by 4.1% year on year in the third quarter of 2026, despite the continued energy shock. Agriculture is projected to be the main driver of production, with growth reaching 19.9%.
Services are expected to expand by 3.9%, supported by accommodation and food services and non-market services.
Secondary activities, however, are forecast to remain in contraction, although at a slower pace. Their value added is expected to fall by 1.9% year on year, compared with a 3.9% decline in the second quarter.
Food processing, the automotive industry and electrical equipment manufacturing are expected to show greater resilience. Textile production, chemical industries, rubber manufacturing and electronics are likely to remain below their levels in the same period last year.
Import prices are expected to continue rising faster than export prices in the third quarter, further squeezing margins and worsening Morocco’s terms of trade.
Export volumes are forecast to grow by 6.2%, slowing from 7.6% in the second quarter. Import growth is also expected to ease, helping reduce the negative contribution of foreign trade to economic growth to 1.2 percentage points, from 1.6 points in the previous quarter.
Investment spending by businesses is likely to remain constrained by the high cost of imported equipment and construction materials. Continued infrastructure projects should nevertheless support gross fixed capital formation, which is projected to rise by 6.2% year on year in the third quarter.
Household consumption is also expected to increase by 4.1% over the same period, supported by a slight decline in inflation of 0.3%.
Lower food prices, down 3.6%, are expected to help contain the impact of a 2.4% increase in non-food prices, largely driven by higher gasoline prices. The HCP pointed to falling prices for poultry, vegetables and eggs, as well as olive oil, whose decline is expected to contribute 1.1 percentage points to the reduction in inflation.
Growth forecast to accelerate to 4.7% in Q4
The HCP projects economic growth of 4.7% in the fourth quarter of 2026, based on the assumption that energy prices remain relatively stable and no major new shock occurs.
The anticipated improvement is expected to stem largely from a slower decline in extractive industries and related activities as maintenance work carried out during the second and third quarters comes to an end.
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Exports are also expected to improve as fertilizer-importing countries in Latin America and Africa resume their inventory replenishment cycle. Agriculture and services are projected to remain important contributors, together accounting for an estimated four percentage points of growth.
Domestic demand is expected to continue supporting activity in the final quarter. Household consumption is forecast to rise by 4.3% year on year, benefiting from favorable bank financing conditions and the extension of financial measures designed to limit the effects of energy price inflation.
Investment is expected to increase by 6.8%, driven by major infrastructure projects.
The HCP cautioned, however, that the outlook remains uncertain. A renewed escalation of tensions in the Middle East, combined with growing difficulties in fuel supplies during the winter, could generate additional inflationary pressure while constraining production capacity and economic growth.
