Morocco

Favorable growth outlook despite weaker external demand

The Moroccan economy performed well in 2025 despite a volatile global economic environment. Agriculture (9% of GDP and 27% of employment in 2024) started to recover after three consecutive years of poor harvests due to droughts, despite the fact that production volumes lingered around 10% below 2021 levels. Extractive industries (phosphates), automotive, construction, and services (retail, tourism, finance) remained robust growth drivers, supported by investment flows (both domestic and foreign) in these sectors.

The momentum should remain broadly similar in 2026. Barring extreme weather conditions, agriculture should remain supportive as harvests will benefit from improved rainfall in H2 2025. Construction will be a strong growth driver as the preparation of the 2030 FIFA World Cup will bolster infrastructure investment, such as the new terminal at the Mohamed V airport in Casablanca (investment slated at USD 1 billion), the extension of the Tangier-Kenitra high-speed line to Marrakesh, and the Hassan II Stadium (USD 490 million), set to become the largest football stadium in the world. Furthermore, the authorities are also looking to enhance activity in the southern provinces through investments in economic zones and logistics hubs (El Argoub, El Guerguerat, Dakhla). Investment in energy (particularly renewables) and water (dams) will also continue as part of the efforts to achieve energy sovereignty. Manufacturing growth is likely to decline mainly on back of weak automotive demand in Europe that will affect production and export volumes. Activity in textile clothing will also remain lacklustre due to depressed external demand. Services will remain the main growth driver. Tourist arrivals, which already reached a record high of 19.8 million visitors in 2025 (+14% YoY), should continue increasing albeit at a slower pace. Financial services will remain buoyant given Morocco’s increasing attractivity as a financial hub (through the Casablanca Finance City) and the presence of large Moroccan banks in West and Central Africa. On the demand side, investment will remain the primary driver, with the public component focused on infrastructure, and the private component directed towards high performing industries and services. Consumption will also remain solid, supported by wage growth, as well as low and stable inflation. Inflation will remain below 2% and expectations are well anchored, so the central bank (Bank al-Maghrib) is likely to retain its current monetary policy stance. The central bank has kept the key rate at 2.25% since March 2025.

Despite large amounts of public expenditure, the fiscal trajectory remains sustainable

While the fiscal trajectory has improved in recent years, the reduction in the public deficit remains very progressive. Revenue has increased significantly (estimated at +16% YoY in 2025) thanks to fiscal consolidation measures on income and corporate taxes since 2023, as well as higher proceeds from VAT and other consumption taxes, but so has expenditure (+15.6% over the same period) driven by large increases in the wage bill and interest payments. An extension of a similar trend is expected in 2026, with a slight improvement in the public deficit. Public spending growth will continue to be driven by current expenditures, including the wage bill (+8.4%) as the monthly minimum wage in the public sector was increased by 12.5% in 2025 (from MAD 4,000 to MAD 4,500). Furthermore, funding for health and education is expected to increase by over 15% as part of the commitments made by the government following the October 2025 protests (see section below). By contrast, interest payments and investment expenditure should ease slightly relative to 2025. As 2026 is an election year and considering the tense social climate, spending could overshoot the budget. Revenue growth will continue to benefit from strong economic activity, both from direct and indirect taxes, as well as additional measures introduced to improve the tax system in the 2026 finance bill. These mainly focus on better integrating the informal sector in the economy, fighting against fraud, and harmonising fiscal rules. Morocco’s flexible credit line with the IMF (of around USD 4.5 billion) was renewed in April 2025 for a two-year period and is considered by the authorities as a precautionary measure to be used in case of adverse economic shocks. As the deficit is gradually stabilising overall, the debt-to-GDP ratio will decline on the back of stronger growth. Morocco’s public debt is quite resilient to external shocks due to its structure (75% domestic, denominated in dirhams and mostly medium to long-term maturity) and the country’s exchange rate-regime (weighted peg with adjustable fluctuation bands).

Robust external position despite large import needs

While its drivers will remain broadly unchanged in 2026, the current account deficit will slightly widen. This will mainly be due to a widening of the large trade deficit. Exports of phosphate, which have been buoyant in recent years, will slow due to an expected decline in prices of diammonium phosphate. While the Moroccan automotive industry continues to be cost-competitive, weak demand in Europe will weigh on export volumes. Similarly, garment exports will continue to face weak external demand. Imports will continue to increase despite lower oil prices, driven by purchases of equipment goods for infrastructure projects and robust domestic demand. However, Morocco’s structural trade deficit is mostly offset by the services surplus, which is fuelled by tourism revenues, and the secondary income surplus, which benefits from robust remittances inflows from expatriate workers settled in the EU and the Gulf countries. The deficit will be comfortably financed by external loans and FDI (net inflows estimated at 1.5% of GDP). Foreign exchange reserves, which covered around 5.5 months of imports as of end 2025, are adequate and should remain so in 2026.

Elections approach amid a tense social climate

The 2021 Moroccan general election marked a considerable change in the composition of the Parliament after the National Rally of Independents (RNI) became the largest party with 102 out of 395 seats in the House of Representatives and 27 out of 120 seats in the House of Councillors. Its leader, Aziz Akhannouch subsequently formed a coalition government with the Authenticity and Modernity Party (PAM, 87 and 19 seats) and the Istiqlal party (PI, 81 and 17 seats), giving it an absolute majority in both houses. The next election for the House of Representatives is scheduled for September 2026. Akhannouch announced that he would not be participating in the next legislative elections, so RNI’s next leader is likely to be Mohamed Chouki who is the parliamentary group’s current president. Roughly the same coalition is expected to remain in power although the breakdown of seats might shift slightly as the opposition is too fragmented to challenge the RNI-PAM-PI alliance. However, the social climate, which was already tense in 2025, will require the parties to go further than simply promise continuity and to properly address social issues. In particular, the relationship between the nation’s youth and the political sphere has deteriorated in recent years. This culminated in the GenZ 212 protests in October 2025 where the main grievances were underspending on health and education compared with overspending on sports infrastructure, lack of opportunities (and high urban youth unemployment), social inequality and a disconnect with the political class. Reforms to improve political involvement and additional funding for public services were implemented, but expectations for the new government to deliver on these issues will nevertheless be high.

Looking outward, the relationship with Algeria will remain the main point of tension due to the latter’s support for the Polisario Front, which controls a third of Western Sahara. While the diplomatic relationship with Spain and France (Morocco’s two-largest trading partners) has improved in recent years after both countries approved the Moroccan plan for Western Sahara’s self-governance, the overall relationship with the European Union on the matter continues to be a complex once. That said, Morocco remains a critical partner for the control of migratory flows and trade ties are also likely to increase as Moroccan industries are increasingly integrated into European value chains. Considering the current geopolitical environment, Morocco’s solid relationship with the US and its current administration is noteworthy. This was evidenced by the decision to sign President Trump’s Board of Peace charter in January 2026, making it the first African country to do so. Morocco will also continue to strengthen its ties with countries in sub-Saharan Africa. On that score, the “South-South” cooperation remains a key component of the country’s foreign policy through flagship projects such as the Africa-Atlantic gas pipeline with Nigeria and most West African countries.

Payment

Bank transfers are becoming the most popular means of payment for both domestic and international transactions. Cheques are still commonly used as instrument of payment and also constitute efficient debt recognition titles: debtors may be prosecuted if they fail to pay the amount owed. Bills of exchange also constitute an attractive means of payment, because they are a source of short-term financing by means of discounting, instalment, or transfer. Promissory notes are used to record the financial details of personal debts, business debts and real estate transactions. They are legally binding contracts that can be used in a court of law if the debtor defaults. A promissory note acts as solid evidence of an agreed payment, and subsequently debt in case of dispute.

Debt Collection

Amicable phase

Debt collection must begin with an attempt to reach an amicable settlement. Creditors attempt to contact their debtors through different means (telephone calls, written reminders such as formal letters, emails or extrajudicial notifications, etc.). Amicable settlement negotiations can be intense, and cover aspects such as the number of payment instalments, write-offs, guarantees/collateral, and grace period interest. Moroccan law states that a lawyer can acknowledge the signature of the debtor via payment plans, which are signed, certified, and legalized by the competent authorities in Morocco. The creditors’ lawyer can subsequently use this payment agreement as debt recognition in case of legal action.

Legal proceedings

Morocco has a legal system based on French legal tradition and courts based on Islamic traditions (which relate exclusively to the personal status of litigants). Courts include proximity courts (juridictions de proximité) in charge of settling disputes between individuals, Courts of First Instance (tribunaux de première instance) dealing with all civil matters, Commercial Courts dealing with business disputes, Appellate Courts (cours d’appel) dealing with civil and administrative matters, and a Court of Cassation (Cour de cassation).

Emergency proceedings

Where the debt is linked to a recognised title or promise, it is possible to obtain an order for payment. To do this, an application must be sent to the registry of the competent court. The debt must be proven, liquid (i.e. free), payable and not disputed. If the defendant does not file a defence within eight days, it is possible to obtain an enforceable decision. If the defendant submits a defence within eight days of receiving the order for payment, the case is returned to the ordinary procedure. However, the appeals chamber of the court of first instance or the court of appeal may, by reasoned judgment, suspend enforcement in whole or in part.

Ordinary proceedings

A writ of summons is sent by the creditor’s representative to the relevant court and served by a bailiff to the debtor, who may subsequently obtain legal representation in the period prescribed by the judge and file a counter claim. Several hearings may be required for the exchange of written submissions, transmissions of documents and to produce the relevant evidence.

The main hearing is set by the judge to hear the presentation of the pleadings. Discussions and pleadings are conducted by the judge during the public hearing. The case is then taken under deliberation to allow judges to discuss the means, grounds, and pronouncement that make up the content of the judgment. After the sitting of the judgers, a reasoned judgment is rendered. It can usually be obtained within an average delivery time of 14 months.

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Enforcement of a Legal Decision

Once all appeal venues have been exhausted, a judgment becomes final and enforceable. Garnishee orders are normally efficient for seizing and selling the debtor’s assets.

According to Moroccan law, commercial courts are obliged to recognize judgments rendered abroad, even if there is no convention signed for this purposes with the issuing country. In order to be recognized and enforced, the original copy of the foreign judgment must be provided to the court with a certificate of non-appeal. When a foreigner gets final judgment that they want to enforce in Morocco and, if not, when seeking enforcement of a Moroccan judgment abroad, they must follow exequatur proceedings. There are two enforcement procedures. The first is uniquely Moroccan, whereas the second is fixed by judicial bilateral agreement between Morocco and other countries, including Germany, Belgium, the United States of America, the United Arab Emirates, Spain, France, Italy and Libya.

Insolvency Proceedings

Insolvency proceedings are regulated by Book V of the Commercial Code. It provides for prevention of difficulties (alert procedure and amicable settlement procedure) as well as formal insolvency procedures (judicial redress proceedings and judicial liquidation proceedings).

Because of the COVID-19 situation, Morocco has taken two measures in the framework of the insolvency proceedings:

The possibility for debtor companies to initiate the procedure to request a grace period to enable them to legally suspend payments (if the insolvency is caused by COVID-19).

The possibility of obtaining a stimulus credit dedicated to companies impacted by COVID-19.

ALERT PROCEDURE

The alert procedure is initiated by a business’ partners or auditors (external auditors hired by the company to rectify the financial situation), who are required to notify the company manager of any opportunities to redress the situation within eight days. If no steps are taken to remedy the situation within 15 days, a general assembly must be convened to take a decision on how to redress the situation based on the auditor’s report.

AMICABLE SETTLEMENT PROCEDURE (CONCILIATION)

Amicable settlement procedures can only be implemented by a commercial company, trader, or artisan, who is experiencing financial difficulties but is not yet cash flow insolvent. Once initiated, the debtor is placed under the supervision of the Court. The Court subsequently appoints an external conciliator for a limited period of three months to assist the debtor in reaching an agreement with its creditors. A settlement can be reached with all creditors or the debtor’s “main creditors”. Creditors are entitled to their entire claim, but the conciliator may propose an arrangement or creditors may assign a portion of the debt if they so wish. Once approved by the Court, all judicial proceedings relating to debts covered by the agreement are suspended for the duration of the amicable settlement agreement.

SAFEGUARD PROCEDURE

This is mechanism is intended to allow a company to reorganize in order to continue to survive. To benefit from it, the company must establish that it is not in a state of cessation of payments. However, in the context of this procedure, it is still possible to negotiate with your creditors, in order to avoid arriving at to this cessation of payments, to the receivership proceedings. It is the company that seizes the court, which pronounces a judgment of opening of the safeguard procedure. The procedure starts with a six-month observation period (renewable once) during which the insolvency administrator, in collaboration with the manager, draws up a “economic and social balance sheet” (BES) for the company: an update on the origin of the difficulties, he current financial situation, the corrective measures to be envisaged and the resulting prospects. During this period, the company takes appropriate measures to correct the situation, and it helps the administrator to develop a backup plan. The adoption of such a plan by the court marks the end of the observation period and the beginning of the actual plan, which can last up to five years. Here again, the manager remains master aboard his company but, above all, the company will benefit from radical measures that the court can only impose:

suspension of maturities of debts;

stop individual prosecutions;

obligation for all creditors to declare their claims;

stop interest rate.

JUDICIAL RECEIVERSHIP

This procedure is only available for debtors that have become insolvent (état de cessation de paiements), but whose financial situation is not irreparably compromised. An insolvency judge and an office holder (the person appointed by the court as part of an insolvency or liquidation; also acts as the syndicate) are appointed by the court. During the process, the debtor company and its management remain in possession of the company’s assets and the debtor continues its business. The receivership procedure can result in either the reorganisation of the debtor’s business or its liquidation. The office holder is required to prepare a report on the situation of the company within four months from the opening of the proceedings. In his report, the office holder will either recommend a continuation plan for the debtor, the sale of the business, or liquidation. The court is then required to reach a decision on the fate of the debtor, based on the report. There is no direct vote by the creditors on the options available to the debtor during the procedure.

JUDICIAL LIQUIDATION

The judgment initiating the procedure makes all the debts immediately due and payable, the creditors within a period of two months must present their claims. Moroccan creditors have two months to submit their declarations; creditors residing abroad have a period of four months. Liquidation proceedings may terminate prematurely before a distribution in liquidation if the debtor has no more debt, the office holder has sufficient funds to pay all the creditors in their entirety, or the debtor does not have enough assets to cover the costs of the liquidation procedure.

Under Moroccan law, there are no specific rules on the priority of claims in the event of insolvency. Nevertheless, there are some privileged creditors such as: the employees, the public treasury, the social agencies, the creditors of a collective conciliation, finally the unsecured creditors.

Last updated:January 2026