Despite external price pressures, government expects to control inflation

Morocco's Ministry of Economy and Finance forecasts that inflation will remain within price stability targets, projected at around 1.5% for 2026 and 2% for 2027. This outlook holds despite the resurgence of imported inflationary pressures. Following a peak inflation rate of 6.6% in 2022 and 6.1% in 2023, inflation has returned to lower levels. The ministry's report on the general framework for the 2027 budget and the three-year fiscal programming (2027–2029) indicates that inflation stabilized at 0.9% in 2024 and 0.8% in 2025. This stabilization is attributed to improved supply conditions and reduced price pressures on several essential goods.

During the first six months of 2026, this downward trend continued, with average inflation at 0.4% and core inflation at -0.1%. This was largely due to falling food prices, particularly olive oil, which supported price stability and purchasing power. Minister Nadia Fettah Alaoui highlighted that government measures to support essential goods and ensure supply continuity have helped mitigate the impact of external shocks on domestic prices. However, she cautioned that vigilance remains necessary due to rising energy and raw material prices and ongoing supply chain disruptions.

Regarding growth-driving activities, cement sales showed a notable recovery in April and June 2026, increasing by 32% and 28% respectively. This reflects a gradual rebound from an earlier decline influenced by heavy rainfall and construction halts during Eid al-Adha. The sector's prospects are bolstered by an ambitious investment program focused on infrastructure, public facilities, transport networks, and urban and water development. Demand for housing continues to support the real estate sector, with over 111,000 beneficiaries of the direct housing support program as of July 3, 2026, further enhancing the outlook for real estate and related industries.

Electricity production has also increased, driven by a 22.5% rise in renewable energy output, although the national electricity and water office's production decreased by 8.5%. This shift reflects a gradual transformation of the national electricity mix, with growing contributions from renewables and improved hydroelectric output due to higher water inflows and dam reserves. This dynamic is expected to accelerate with increased investment in renewable production, transmission, and storage, aligning with rising demand and supporting industrial investment. Despite a limited decline in the industrial production index in the first quarter of 2026, the performance of sectors like automotive and pharmaceuticals remained positive. Available indicators confirm the robustness of industrial activity, with a high capacity utilization rate of 77.6% and a 7.7% increase in manufacturing exports.

“

Vigilance remains necessary in the face of rising energy and raw material prices and continued supply chain disruptions.