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Economic and political overview

Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

In recent years, the Moroccan economy has been characterised by macroeconomic stability and low levels of inflation, relying mostly on exports, a boom in private investment, and tourism. However, the COVID-19 shock has pushed the Moroccan economy into its first recession since 1995. The country’s GDP rebounded in 2021 when it grew an estimated 7.9%, but was hindered by global shocks and a severe drought in 2022, with GDP growing by only 0.8% (IMF). The recovery of tourism, strong remittances, and resilient exports have partially offset the shocks derived from Russia’s invasion of Ukraine, which fueled inflation and reduced households’ purchasing power. The IMF expects Morocco’s growth rate to hover around 3% this year and the next, assuming a gradual improvement of external conditions and an average agricultural season.

The fiscal impact of the health and social protection reform and postponement of the liquefied petroleum gas and flour subsidy reform slowed the consolidation of the budget deficit, which was estimated at 5.1% of GDP in 2022. The government published its three-year budget plans as part of the 2023 Budget, which envisages a continued reduction of the deficit to closer to pre-pandemic levels (projected at 5.2% of GDP this year and 4.5% in 2024 – IMF). The debt-to-GDP ratio has been increasing in recent years, reaching 70.3% in 2022 (from 68.9% one year earlier), and is expected to remain stable over the forecast horizon. The average annual inflation rate reached 6.2% in 2022 as a result of the 11% increase in the food index and the 3.9% increase in the non-food index (data HCP). Higher energy prices contributed to inflationary pressures (the country’s energy bill has more than doubled in the first eleven months of the year), and the Central Bank raised its benchmark interest rate to 2.5% in December in an effort to curb inflation.

Albeit its high levels, the unemployment rate has been declining in recent years and averaged 11.1% in 2022. For 2023 and 2024, the IMF expects it to further decrease to 10.7% and 10.2%, respectively. According to the Moroccan Higher Planning Commission, unemployment particularly affects the youth (15-24 years of age – at 31.8% as of August 2022 – latest data available) and recent graduates. The rate of poverty remains one of the highest in the Mediterranean region, with almost one-fifth of the population living near the poverty line. Finally, the GDP per capita (PPP) was estimated at USD 9,808 in 2022 by the IMF.

 
Main Indicators 202020212022 (E)2023 (E)2024 (E)
GDP (billions USD) 121.35142.87138.05138.78147.08
GDP (Constant Prices, Annual % Change) -7.27.91.13.03.1
GDP per Capita (USD) 3,3753,9343,7653,7493,936
General Government Balance (in % of GDP) -5.5-5.9-5.0-4.9-4.4
General Government Gross Debt (in % of GDP) 72.268.968.868.368.4
Inflation Rate (%) 0.61.46.64.62.8
Unemployment Rate (% of the Labour Force) 12.211.912.911.010.5
Current Account (billions USD) -1.42-3.24-5.96-5.18-5.08
Current Account (in % of GDP) -1.2-2.3-4.3-3.7-3.5

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

Given the richness of Morocco's soil, the economy is dominated by the agricultural sector, which employs one-third of the workforce and contributes 12% of GDP (World Bank, latest data available). Barley, wheat, citrus fruits, grapes, vegetables, argan, olives, livestock and wine are the country's main crops. In recent years, the government has focused on the sector through its "Green Morocco Plan" and the Agricultural Development Fund. The country’s cereal production is highly variable, with local dams providing irrigation for only 15% of the agricultural land and rainfed agricultural production accounting for 85% of the aggregate output (FAO). According to preliminary data by the Ministry for Agriculture, the agricultural sector’s value-added decreased by 14% year-on-year during the 2021/22 crop year. The production of the main cereals (common wheat, durum wheat and barley) for the 2021/2022 crop year was estimated at 32 million quintals, down 69% from the previous year's record production, also due to the drought experienced by the country: at the end of April 2022, a rainfall level of 188mm was recorded, which is 42% lower than the average for the last 30 years (327 mm) and 35% lower than the previous year (289 mm).

Industry contributes 26.1% of the GDP and employs 23% of the workforce. The main sectors are textiles, leather goods, food processing, oil refining, and electronic assembly. However, new sectors have been booming: chemistry, automotive parts, computers, electronics and the aerospace industry. The automotive industry, in particular, has been growing in the last decade, with double-digit annual growth in terms of job creation and exports (becoming the country’s main exporting sector and Africa’s main automotive hub). Overall, the manufacturing sector is estimated to account for 15% of GDP. The emergence of new industries should allow the country to reduce its dependence on the agricultural sector. Morocco’s industrial sector is the largest beneficiary of foreign direct investment. The country has around 75% of the world's estimated reserves of phosphates, and the mineral sector accounts for almost 30% of exports (Oxford Business Group). Mining accounts for 10% of GDP, of which 90% derives from phosphates.

The services sector accounts for slightly above half of GDP (51.6%) and gives employment to 44% of the workforce. It is spearheaded by real estate and tourism, which has been very dynamic in recent years (accounting for around 11% of GDP and hitting a record of nearly 13 million arrivals in 2019). Although tertiary activities recorded a downward trend following the outbreak of the COVID-19 pandemic, with a particularly weak tourism performance, improvements were achieved in 2022 when tourist arrivals reached 84% of the pre-pandemic level and the value tourist receipts in foreign currency stood at MAD 81.7 billion at the end of November 2022 (data Ministry of Tourism). Finally, the Moroccan banking sector is dominated by locally owned banks, which account for more than 80% of industry assets (U.S. Department of Commerce).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 33.3 23.1 43.7
Value Added (in % of GDP) 12.0 26.1 51.6
Value Added (Annual % Change) 17.6 6.8 6.4

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Moroccan Dirham (MAD) - Average Annual Exchange Rate For 1 USD 9.819.699.399.609.50

Source: World Bank - Latest available data.

 

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Foreign Trade

Morocco is very open to foreign trade, which represents 87% of its GDP (World Bank, latest data available). According to the latest figures from the Office des Changes, in terms of products, in 2021 exports were led by natural and chemical fertilizers (15.7%), cars (11.4%), insulated wire, cable and other conductors for electricity (8.7%), clothes (6.9%), and phosphoric acid (6%); whereas hydrocarbons were the main imports (6.8%), followed by vehicle parts (3.7%), cars (3.5%), petroleum gas (3.3%), plastics (3.1%), and wheat  (2.7%).

The country's main trade partners are Spain (21.5%) and France (20.4%), followed by Italy (4.3%) and Germany (4.1%). Spain is also the main supplier (15.7%), ahead of China (11.7%), France (10.5%), the U.S. (6.4%) and Turkey (5.8% - data OdC for 2021). While European countries are the main trading partners (59.4% of total exports, 49% of imports), Morocco has also been strengthening its commercial integration with the rest of Africa, namely through the ratification of the African Continental Free Trade Area Agreement.

Morocco has a structurally negative trade balance, which continues to deplete its foreign exchange reserves. In 2021, the overall trade deficit was estimated at 9.1% of GDP by the World Bank (from 7.3% one year earlier). According to WTO data, in 2021 Morocco exported USD 35.8 billion worth of goods, recording an increase of 32.1% year-on-year; whereas the value of its imports stood at USD 58 billion, 32.4% more than the previous year. Morocco is a net exporter of services, with USD 15.4 billion in exports (+16.5% y-o-y) against USD 8.5 billion in imports (+39% y-o-y). The latest figures from the Office des Changes show that in the first eleven months of 2022 trade in goods marked an increase both in imports and exports: the latter rose by 42.3% reaching a value of MAD 676.8 billion; similarly, exports stood at MAD 389.7 billion, with an increase of 33.1% from the same period one year earlier. Thus, the trade deficit increased by 56.9%, mostly due to the fact that the energy bill has more than doubled, reaching MAD 141.5 billion.

 
Foreign Trade Values 20172018201920202021
Imports of Goods (million USD) 44,49051,03850,73443,83158,034
Exports of Goods (million USD) 25,27228,60929,13227,15935,843
Imports of Services (million USD) 8,7089,2578,6386,1308,526
Exports of Services (million USD) 16,59217,99318,72813,26815,461

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20172018201920202021
Foreign Trade (in % of GDP) 74.277.376.068.875.0
Trade Balance (million USD) -18,065-20,253-19,771-15,540-19,905
Trade Balance (Including Service) (million USD) -10,551-12,131-10,049-8,813-12,969
Imports of Goods and Services (Annual % Change) 4.64.82.1-11.92.0
Exports of Goods and Services (Annual % Change) 10.83.85.1-15.01.6
Imports of Goods and Services (in % of GDP) 41.643.441.938.142.0
Exports of Goods and Services (in % of GDP) 32.633.834.130.832.9

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20222023 (e)2024 (e)2025 (e)2026 (e)
Volume of exports of goods and services (Annual % change) 43.22.14.64.14.3
Volume of imports of goods and services (Annual % change) 10.9-8.52.63.33.3

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Morocco is a member of the following international economic organisations: IMF, Development (AFESD), ICC, Arab Maghreb Union (AMU), WTO, Arab Monetary Fund (AMF), G-77, Arab League, among others. For the full list of economic and other international organisations in which participates Morocco click here. International organisation membership of Morocco is also outlined here.
Free Trade Agreements
The complete and up-to-date list of Free Trade Agreements signed by Morocco can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)		 2021
Spain 21.5%
France 20.5%
Brazil 5.5%
India 4.9%
Italy 4.3%
See More Countries 43.2%
Main Suppliers
(% of Imports)		 2021
Spain 15.7%
China 11.7%
France 10.5%
United States 6.4%
Türkiye 5.8%
See More Countries 49.9%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
King: MOHAMED VI (since 30 July 1999) - hereditary
Prime Minister: Aziz AKHANNOUCH (since 7 October 2021)
Next Election Dates
House of Representatives: 30 September 2026
House of Councillors: 31 October 2027
Current Political Context
King Mohammed VI – who has been ruling the country since 1999 - appointed a new government comprising a coalition of liberal and conservative parties, led by Aziz Akhannouch, after the victory of his National Rally of Independents (RNI) party in the general elections that were held in September 2021, which revealed the collapse of the Islamist Justice and Development Party (PJD) that had led the government over the previous two legislative terms (from 125 seats in the assembly to only 13 seats out of 395).
A new coalition government was thus formed by the liberal RNI and Authenticity and Modernity (PAM) parties together with the conservative Istiqlal. The three parties together enjoy a comfortable majority, holding 270 seats compared to the 198 needed to pass legislation, with a shared common platform focusing on economic and social reforms. The coalition government published its three-year budget plans as part of the 2023 budget, focusing on employment creation measures and an extension of social programmes while also seeking a reduction of the deficit.
The dispute with the Polisario Front, which is seeking independence for Western Sahara, remains one of Morocco's main political challenges.
Main Political Parties
Multi-party system, consisting of numerous parties. Parties work with each other to form coalition governments.

- National Rally of Independents (RNI): centrist, relatively inclined towards social liberalism. Was the leading party in the last elections
- Authenticity and Modernity Party (PAM): modernist and reform-oriented, formed by an advisor to the King and former Interior Minister
- "Istiqlal" Independence Party (PI): conservative nationalist
- Socialist Union of Popular Forces (USFP): left-wing socialist
- People's Movement (MP): centrist, dominated by Berber (Tamazight) speakers, but without a distinct Berber agenda
- Constitutional Union (UC): economically liberal, conservative on societal matters
- Party of Progress and Socialism (PPS): socialist, formerly communist
- Justice and Development Party (PJD): moderate Islamist, heads the ruling coalition
Executive Power
The executive power is shared between the government and the King. The Prime Minister is promoted to head of government and as such presides over the Governing Council, but the Council of Ministers continues to be chaired by the King. The Government Council consists of all the ministers, deputy ministers and other Secretaries of State. It discusses public and sectoral policies, the commitment of the government's responsibility to the House of Representatives, current issues related to human rights and public order, bills, decrees, draft regulatory decrees and the appointment of secretaries and central directors of the public administration, university presidents, deans and directors of schools and higher institutes. The Governing Council only has deliberative power concerning the general policy of the State, international conventions, and the finance bill. The Council of Ministers, where only the head of government and the ministers sit, is responsible for the strategic direction of the state policy, the revision of the Constitution, drafting organic laws, general guidance of the finance bill, amnesty, draft texts related to the military, the declaration of a state of siege, the declaration of war.
Legislative Power
The Parliament comprises the House of Representatives (395 deputies elected by universal direct suffrage for 5 years) and the House of Councillors (120 members elected by indirect universal suffrage for 6 years).
The Parliament votes the law; any bill must be successively examined by the two Houses. It moreover shares the initiative of the laws with the Prime Minister.
 

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COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Morocco, consult the official governmental portal CovidMaroc (in French and Arabic), which also provides data about the geographical distribution of the epidemic. For daily updates on the situation, visit the website of the Moroccan Press Agency (MAP – in French). 
For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.
Sanitary measures

To find out about the latest public health situation in Morocco and the current sanitary measures in vigour, please consult the official government platform CovidMaroc's dedicated pages (in French and Arabic). Further information can be sought on the website of the Ministry of Health (in French and Arabic). Further details in English are available here.
Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.
Import & export restrictions

For the up-to-date information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the website of the Moroccan Customs.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Morocco on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
To consult a list of the economic measures put in place by the Moroccan government to address the impact of the COVID-19 pandemic on the national economy, please visit the dedicated pages on the website of the Ministry of Economy and Finance (in French and Arabic). The portal of the Moroccan Ministry of Interior provides information about the support packages for families working in the informal sector affected by the epidemic (in Arabic). For a summary in English of the economic and fiscal measures in vigour, refer to the website of KPMG.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Moroccan government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Morocco in the IMF’s Policy Tracker platform.
Support plan for businesses

For the information on the local business support scheme established by the Moroccan government to help small and medium-sized companies to deal with the economic impacts of the COVID-19 epidemic on their activity, please consult the portal of the Ministry of Economy and Finance (in French and Arabic). The website of the Customs and Indirect Taxes Administration provides additional information (in French).
For a summary in English of the economic and business measures adopted, refer to the website of KPMG.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the OECD's SME Covid-19 Policy Responses document. You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.
Support plan for exporters

For the up-to-date information on possible support plans for exporters in Morocco, if applicable, please consult the website of the Ministry of Economy and Finance (in French and Arabic) and that of the national Investment and Trade Agency.
 

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