Bank Al-Maghrib warns economic growth is failing to improve living standards

Bank Al-Maghrib has warned of a growing disconnect between Morocco's strong macroeconomic performance and the daily reality experienced by many citizens. Despite economic growth accelerating to 4.9% in 2025, up from 4.4% in 2024, the central bank says limited job creation and persistent social and regional disparities are preventing many Moroccans from benefiting from the country's economic progress.

In its 2025 annual report, drawing on data from the High Commission for Planning (HCP), the central bank stressed that Morocco's ambition to achieve social and economic emergence depends not only on sustaining growth but also on distributing its benefits more equitably, narrowing the gap between economic indicators and citizens' lived experience.

Weather boosts agriculture, but water stress remains

After a difficult start to the 2024–2025 agricultural season, rainfall between February and April reversed the trend, helping agricultural value added grow by 8.2% after contracting 5.7% the previous year.

Average cereal yields increased from 12.6 to 16.5 quintals per hectare, lifting the harvest to 43.1 million quintals, compared with 31 million in the previous season. Production of vegetables, fodder and sugar crops also improved, although olive and citrus harvests declined.

The central bank nevertheless cautioned that the rebound should not overshadow Morocco's chronic water stress. It urged authorities to accelerate water-related projects while prioritizing fair water governance and socially acceptable pricing policies.

Water shortages also affected food supply, contributing to a 3.1% increase in food prices in 2025 after a 2.6% decline the previous year. Fresh vegetables recorded the sharpest increase (9.5%), followed by citrus fruits (1%) and eggs (0.9%), while poultry and rabbit prices fell by 2.9%.

Employment remains the «weak link»

Despite the stronger economy, Bank Al-Maghrib described employment as the country's «weakest link». It said recent policies have failed to generate sufficient momentum in the labor market, with job creation continuing to lag behind economic growth.

The economy created 193,000 jobs in 2025, up from 82,000 a year earlier, yet the unemployment rate declined only marginally, from 13.3% to 13%. Of the 407,000 people who reached working age during the year, only 177,000 entered the labor force, leaving around 1.6 million people unemployed.

Young people and women remained the hardest hit, with unemployment rates reaching 37.2% and 20.5%, respectively. Around three million young Moroccans were neither in education, employment nor training.

Growth yet to reach households

Beyond weak job creation, the report highlights persistent social and regional inequalities that continue to widen the gap between economic performance and how households perceive it. The wealthiest 20% of households spend more than seven times as much as the poorest fifth, while urban household spending is almost twice that of rural households.

The central bank also called for better-targeted public support for vulnerable groups. It noted that although the government spent 18 billion dirhams on subsidies, much of the benefit went to wealthier households. Tax exemptions, meanwhile, had a fiscal cost exceeding 32 billion dirhams.

To ensure stronger economic growth translates into higher living standards, Bank Al-Maghrib called for improvements in education and workforce training, modernization of vocational training, stronger investment, continued structural reforms and a greater contribution from the private sector.

The findings echo those of a recent report by the Omega Center for Economic and Geopolitical Research, which similarly concluded that Morocco's economic growth has yet to translate into meaningful improvements in household living standards.