Morocco is expected to be faced with a major water shortfall prompted by either expansion in demand for water or reduction in precipitation induced by climate change. This paper examines the economywide impacts of these factors for Morocco. It uses a computable general equilibrium model augmented with submodules that trace consumption of water by uses and land allocation across sectors including crops, livestock, and forestry. Results show that water scarcity and changes in crop yields induced by climate change could reduce the GDP of Morocco up to 6.7 billion US dollars per year at 2016 constant prices and eliminate many job opportunities, in particular in the rural areas of this country. Only a portion of these negative impacts can be removed with improvements in water use efficiency. The factors mentioned above will reduce productivity of Morocco’s cropland and have the potential to reduce irrigated areas. Due to these changes, production of crops and food products are expected to fall, with increases in crop prices by up to 14.3 percent, assuming other factors being equal. Investment in water use efficiency practices that save water, in particular in agricultural activities, and shifting toward more valuable and less water intensive crops can help to partially mitigate these adverse impacts.