While many emerging economies continue to struggle to regain pre-pandemic growth levels, Morocco stands out as a notable exception. Since 2022, non-agricultural activities have expanded at an average rate of 4.4%, approximately 1.3 percentage points above its historical average. This robust performance has allowed the nation to steadily recover the economic ground lost during the health crisis.

This key observation forms the core of a Policy Paper released in early July 2026 by the Policy Center for the New South, authored by Abdelaziz Ait Ali, Mahmoud Arbouch, Fahd Azaroual, Karim El Aynaoui, and Adnane Lahzaoui. Beyond a cyclical assessment, the study delves into a fundamental question: Is Morocco embarking on a sustained new economic trajectory, or is it merely benefiting from an exceptionally favorable international environment?

+ Growth fueled by substantial public investment + 

The report’s primary finding highlights investment as the bedrock of Morocco’s economic revival. With an investment rate nearing 30% of its GDP, the Kingdom ranks among the top investing economies in its category. The authors largely attribute this momentum to significant investments by the state, public institutions, and state-owned enterprises, channeling funds into major infrastructure projects, transport networks, energy initiatives, and preparations for the 2030 World Cup.

While this policy has undoubtedly accelerated economic recovery, it also exposes a structural limitation. A substantial portion of the necessary equipment is imported, meaning that some of the benefits from these investments accrue more to foreign suppliers than to the domestic productive sector. Consequently, a trade deficit persists, tempering overall growth despite strong performances in export-oriented sectors.

+ Tourism and services lead the charge +

One of the study’s most striking revelations pertains to the very composition of this growth. Contrary to popular belief, Morocco’s economy is not solely propelled by the automotive or manufacturing industries.

The tertiary sector has emerged as the principal engine of recovery. Tourism, now nearing 20 million visitors, alongside transport, logistics, financial services, and engineering activities, now accounts for the majority of value creation. The construction sector is also experiencing robust growth, driven by large-scale infrastructure projects, while agriculture continues to introduce volatility into the economy due to recurring droughts.

+ Morocco benefits from a shifting global economic landscape + 

According to the authors, the Kingdom is currently reaping the rewards of profound transformations in the global economy. Geopolitical tensions between China and the United States, supply chain disruptions exacerbated by Covid-19, and evolving industrial diversification strategies are compelling major international corporations to seek production platforms closer to European and African markets.

In this evolving environment, Morocco is enhancing its appeal.

The study highlights Chinese investments in the electric battery sector, citing projects like Gotion High-Tech in Kénitra and CNGR in Jorf Lasfar, as prime examples of this new industrial dynamism. More broadly, the authors believe that Morocco is progressively establishing itself as a “connector state,” adept at linking value chains across Europe, Africa, and Asia, thanks to its political stability, advanced logistical infrastructure, and extensive trade agreements.

+ Economic credibility reassures investors + 

The report further underscores that this attractiveness is underpinned by robust macroeconomic fundamentals. Financial stability, a gradual improvement in public finances, comfortable foreign exchange reserves, and a reduction in sovereign risk collectively bolster the confidence of foreign investors. Moreover, remittances from Moroccans residing abroad continue to support domestic consumption, while an improvement in terms of trade has helped mitigate the inflationary impacts of external shocks.

+ The true challenge begins now + 

However, the study adopts a more cautious tone when discussing medium-term prospects. Its authors contend that the current model cannot sustainably rely on ever-increasing public investment. They pinpoint three significant limitations: mounting public debt, a gradual decline in investment returns, and the persistent struggles of the private sector to assume a greater role.

The document specifically illustrates that more capital is now required to generate the same point of growth compared to the early 2000s, signaling a diminishing efficiency of investment.

For the researchers, the primary weakness remains the private sector’s capacity to invest, innovate, and enhance productivity. Access to financing continues to be a hurdle for many Small and Medium-sized Enterprises (SMEs), competition from the informal sector weighs on their competitiveness, and public investments absorb an increasing share of available banking resources, thereby limiting credit for businesses.

This situation impedes the emergence of growth driven more by innovation, productivity gains, and private investment.

+ A fresh perspective on economic transformation + 

Finally, the report puts forth an idea deserving of attention: For a long time, the development of emerging nations primarily hinged on industrialization.

The authors suggest that today, certain exportable services—such as tourism, information technology, digital services, and consulting activities—can also become engines of economic transformation, provided they are deeply integrated into international value chains and generate skilled employment.

+ Morocco at its pivotal moment + 

Ultimately, this Policy Paper delivers a nuanced message. Indeed, Morocco currently benefits from a favorable international climate, characterized by geopolitical fragmentation and the reorganization of global production chains. And yes, its stability, infrastructure, and strategic positioning between Europe and Africa enhance its appeal.

However, these advantages alone do not constitute a comprehensive development strategy.

For the authors, the real challenge now lies in converting this window of opportunity into sustainable growth through profound reforms in the labor market, education system, innovation ecosystem, and overall business environment.

In essence, Morocco possesses an unparalleled strategic advantage today. The question is no longer merely whether it can attract more investments, but rather whether it can effectively transform its position as a “connector” in the global economy into a genuine lever for lasting prosperity and strong African economy today.