The engine of Morocco’s growth is running on high-octane public investment rather than broad-based household demand. This disparity was highlighted in the latest World Bank economic update on Morocco, which underscores how large-scale projects—particularly those tied to the 2030 World Cup preparations—are driving the expansion.

Public investment leads the charge

Total investment surged 16.3% in 2025, following a 14% jump the previous year. Construction activity alone grew by 6.7%, fueled by infrastructure projects across the country. Private investment is also showing signs of revival after years of sluggishness, though public spending continues to outpace nominal GDP growth.

Government expenditure rose by 5.1% in 2025, driven by expanded social safety nets, public sector wage increases, and upgrades to essential services. These measures aim to cushion vulnerable households, yet their impact on private consumption remains limited.

Households feel the disconnect

Private consumption growth peaked at 4.7% in 2023 but has since decelerated sharply to just 1.2% in 2025. While inflation cooled to 0.8%, and consumer confidence shows tentative signs of recovery, household spending has failed to keep pace with the broader economic rebound.

This lag suggests Morocco’s growth remains overly reliant on public contracts and mega-projects. The benefits of these investments have yet to trickle down into everyday spending, leaving many families feeling the squeeze despite the headline growth.

Looking ahead to a more balanced recovery

The World Bank anticipates a gradual rebalancing as the current investment cycle matures. With inflation projected to stay low and real incomes expected to rise, private consumption could accelerate to 4.8% by 2028. Until then, Morocco’s economy will continue to outpace household purchasing power, relying heavily on state-led initiatives to sustain momentum.