Investment and the productivity challenge

With a gross fixed capital formation rate approaching 31% of GDP, Morocco ranks among the most dynamic emerging economies in terms of investment. Behind this performance lies a clear ambition: to modernize infrastructures, strengthen the competitiveness of sectors and prepare for major sporting events, from the 2025 African Cup of Nations to the 2030 World Cup. At first glance, the equation looks promising: growth is expected to reach 4.4% in 2025 before easing slightly to 4% in 2026, despite an international environment undermined by trade fragmentation and falling commodity prices. However, these forecasts by the High Commissioner’s Office for Planning (Haut-Commissariat au Plan, HCP) in its latest ″Exploratory Economic Budget″ conceal a disturbing reality: the effectiveness of this investment remains low. Measured by the ICOR  , the Incremental Capital Output Ratio, the return on each Moroccan dirham invested has deteriorated over the decades. Between 2000 and 2009, it took an average of 6.1 units of investment to generate one point of growth. Since 2010, this indicator has almost doubled to 12.5. In other words, Morocco invests a lot, but still does a poor job of transforming its billions into GDP points and jobs.
The contribution of investment to growth has been steadily eroding, falling from 1.7 points between 2000 and 2009 to 0.9 points over the following decade. Admittedly, there has been a slight rebound in the recent period (2021-2024), but it remains fragile and dependent on megaprojects. This raises the crucial question of the quality of investment: how can resources be better channeled into high value-added sectors? How can we integrate regional value chains? And how can we draw on the example of phosphate, the only segment to demonstrate a successful move upmarket, to spread this model to other industries?
In detail, the growth trajectory is based above all on vigorous domestic demand. Final domestic consumption is set to rise by 3.7% in 2025 and 3.5% in 2026, driven by the agricultural recovery, the increase in social benefits and wage increases resulting from social dialogue.
Gross investment, meanwhile, is expected to maintain its momentum (+9.8% in 2025, +7.2% in 2026), boosted by the new investment charter and the infrastructure agenda. 
On the production side, the agricultural recovery remains decisive after several dry seasons. Cereal production for 2025/2026 is projected at 44 million quintals, up 41% year-on-year, but still below the ten-year average. Agricultural value added is expected to grow by 4.7% in 2025, before slowing to 3.3% the following year. Outside agriculture, the trend remains robust, with non-agricultural activities expected to grow by 4.3% in 2025 and then by 4% in 2026. The locomotives are construction and public works (+4.9% in 2025), boosted by construction projects linked to major sporting events and post-earthquake reconstruction, phosphate mining and the chemical industries, which are confirming their move upmarket. 

Khadija MASMOUDI