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Economic and political overview

Economic Overview

Despite facing a series of severe shocks—including the COVID-19 pandemic, a prolonged drought, inflation driven by high commodity prices, and a devastating earthquake—Morocco has shown remarkable economic resilience. This is largely due to a strong macroeconomic policy framework and proactive government measures. GDP grew at an estimated 3.2% in 2024, from 3.2% one year earlier. While domestic demand gained momentum, agricultural production recorded a decrease due to droughts. Economic activity is expected to accelerate to 3.9% in 2025, as agricultural output recovers and the non-agricultural sector continues to expand driven by strong domestic demand. This growth is expected to push the current account deficit towards its medium-term norm of around 3% (IMF).

Since the pandemic, Morocco has made gradual progress in improving its budgetary situation. Recent tax system and administration reforms have broadened the tax base while reducing the tax burden, resulting in higher-than-expected tax revenues in 2024. With only a small portion of the additional revenues being saved, the central government’s deficit for the year stood at 4.1% of GDP, slightly better than the 4.3% forecasted in the 2024 Budget. The 2025 Budget maintains the planned gradual fiscal adjustment, but higher-than-expected revenues should be used to speed up debt reduction to pre-pandemic levels. Morocco’s debt-to-GDP ratio was estimated at 68.7% in 2024 by the IMF (from 69.5% one year earlier), with a marginal reduction anticipated over the forecast horizon (66.9%). After peaking above 6% in 2023, inflation has slowed significantly in 2024, remaining below 2% since February, thanks to declining energy prices. However, a mild increase in headline inflation is expected after April 2025 due to the ongoing partial withdrawal of butane gas subsidies.

Morocco has a young population but continues to face challenges such as emigration, widespread labour market informality, low female participation, and rising unemployment, especially as many young people enter the workforce annually. A comprehensive set of measures, including improved incentives and enforcement, is needed to reduce informality. The unemployment rate is still high (estimated at 13.4% last year), but is expected to follow a downward trend in 2025 (12.6%) and 2026 (12.1% - IMF). According to the Moroccan Higher Planning Commission, unemployment particularly affects the youth (15-24 years of age – at 36.7% in 2024), recent graduates, and women (25.9% each). Despite the progress recorded in recent years, 6.4% of the population in Morocco is multidimensionally poor while an additional 10.9% is classified as vulnerable to multidimensional poverty (UNDP). Finally, the GDP per capita (PPP) was estimated at USD 10,615 in 2024 by the IMF.

 
Main Indicators 2023 (E)2024 (E)2025 (E)2026 (E)2027 (E)
GDP (billions USD) 144.44157.09168.60180.60193.20
GDP (Constant Prices, Annual % Change) 3.42.83.63.43.4
GDP per Capita (USD) 3,9014,2044,4714,7465,034
General Government Balance (in % of GDP) -4.6-4.3-3.9-3.3-3.3
General Government Gross Debt (in % of GDP) 69.568.768.066.966.2
Inflation Rate (%) 6.11.72.32.32.2
Unemployment Rate (% of the Labour Force) 13.013.412.612.111.6
Current Account (billions USD) -0.89-3.14-3.87-4.47-5.18
Current Account (in % of GDP) -0.6-2.0-2.3-2.5-2.7

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 agricultural sector is pivotal for the country’s economy, employing 30% of the workforce and contributing 11.1% 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 "Generation Green" 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). Morocco is a net importer of agricultural and related products. During the 2023/2024 season, persistent drought reduced national cereal production by 42%, bringing it down to 3.3 million tons, according to FAO data.

Industry contributes 24.6% of the GDP and employs 24% 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 14% of GDP. Morocco’s industrial sector is the largest beneficiary of foreign direct investment and the emergence of new industries should allow it to reduce its dependence on the agricultural sector. Moreover, 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. As per official figures, the manufacturing index (excluding oil refining) rose by 9.2% in Q3 2034, driven by strong sectoral growth. The chemical industry led with 18.2%, fueled by exports and innovation, followed by automotive at 17%, reinforcing Morocco’s export strength. Food and apparel grew by 9% and 11.8%, while metal products saw a 13% rise, highlighting industrial resilience.

The services sector accounts for more than half of GDP (54.3%) and gives employment to 46% of the workforce. It is spearheaded by real estate and tourism, which has been very dynamic in recent years: it accounted for around 11% of GDP and hit a record of nearly 13 million arrivals in 2019; after a contraction due to the pandemic, it reached new heights in 2024, when the country welcomed 17 million tourists (+20% y-o-y – data Ministry of Tourism). The banking sector is dominated by locally owned banks, which account for more than 80% of industry assets (U.S. Department of Commerce). The retail sector is led by small retailers, which boast 250,000 shops compared with just 1,000 big retail stores.   

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 29.6 24.1 46.3
Value Added (in % of GDP) 11.1 24.6 54.3
Value Added (Annual % Change) 1.6 1.3 4.4

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 94% of its GDP (World Bank, latest data available). According to the latest figures from the Office des Changes, in 2023, exports were led by seven key products, accounting for 55.8% of total shipments: passenger cars were the main export with a 15.1% share, followed by natural and chemical fertilizers (13%), impacted by falling prices compared to the previous year. Electrical wires and cables ranked third (11.2%), ahead of apparel (6.9%), car parts (3.6%), phosphoric acid (3%), and aircraft components (3%). In the same period, the main imports were gas-oils and fuel-oils (8.1%), parts and components for cars and passenger vehicles (4.3%), petroleum gas and other hydrocarbons (3.3%), passenger cars (3.1%), plastics and various plastic products (2.8%), and wheat (2.7%).

In 2023, the country's main trade partners were Spain (22.5%), France (20.5%), Italy (5.2%), the United Kingdom (4.5%), and Germany (4.3%); whereas imports came chiefly from Spain (15.7%), China (10.6%), France (10.6%), the United States (8.4%), and Türkiye (5.1%). 63.2% of trade in 2023 was conducted with Europe. By country, the trade balance remains in deficit with Spain, though the gap is narrowing. The deficit with China has been worsening since 2011, while the trade gap with the United States is also expanding. With Italy, the trade balance remains negative but showed some improvement in 2023 (data Office des Changes).

Morocco has a structurally negative trade balance, which continues to deplete its foreign exchange reserves. In 2023, the overall trade deficit was estimated at 8.3% of GDP by the World Bank (from 11.5% one year earlier). According to WTO data, in 2023, Morocco exported USD 41.6 billion worth of goods, stable year-on-year; whereas the value of its imports stood at USD 68.6 billion, 4.4% less than the previous year. Morocco is a net exporter of services, with USD 26.6 billion in exports (+21.1% y-o-y, thanks to the good performance of the tourism sector) against USD 12 billion in imports (+11.8% y-o-y). The latest figures from the Office des Changes show that Moroccan exports saw a 5.8% growth in 2024. Leading the charge were automotive exports, which rose by 6.3% to reach MAD 157.6 billion. Imports, on the other hand, grew at a slightly faster pace (+6.4% to MAD 761.44 billion), with the energy bill decreasing by 6.5% to MAD 114.06 billion. The overall trade deficit widened by 7.3%, reaching MAD 306.47 billion.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 50,73443,83158,03471,80768,632
Exports of Goods (million USD) 29,13227,15935,84341,48141,642
Imports of Services (million USD) 9,6317,1408,57310,74612,014
Exports of Services (million USD) 19,35313,86715,41621,98126,621

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

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 76.068.875.5101.193.8
Trade Balance (million USD) -19,771-15,540-19,967-26,462-25,112
Trade Balance (Including Service) (million USD) -10,049-8,813-13,125-15,235-12,013
Imports of Goods and Services (Annual % Change) 2.1-11.910.49.57.4
Exports of Goods and Services (Annual % Change) 5.1-15.07.920.58.8
Imports of Goods and Services (in % of GDP) 41.938.042.456.351.0
Exports of Goods and Services (in % of GDP) 34.130.833.144.842.8

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 1.43.73.83.83.8
Volume of imports of goods and services (Annual % change) 1.53.83.14.04.4

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)		 2023
Spain 22.5%
France 20.5%
Italy 5.2%
United Kingdom 4.5%
Germany 4.3%
See More Countries 43.1%
Main Suppliers
(% of Imports)		 2023
Spain 15.7%
China 10.6%
France 10.6%
United States 8.4%
Türkiye 5.1%
See More Countries 49.6%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
King: MOHAMMED VI (since 30 July 1999) - hereditary
Prime Minister: Aziz AKHANNOUCH (since 7 October 2021)
Next Election Dates
House of Representatives: September 2026
House of Councillors: October 2027
Current Political Context
The year 2024 represents the 25th anniversary of King Mohammed VI's reign. Conmcerning internal politics, Aziz Akhannouch, in office since 2021 and at the head of the Rassemblement National des Indépendants (RNI), the ruling party in the center-right coalition, initiated a ministerial reshuffle that saw the appointment, alongside several replacements, of new ministers such as experts in crisis management and sustainable development.
On the international scene, the conflict over Western Sahara remained at the forefront. U.N. envoy Staffan de Mistura proposed a partition plan entailing the establishment of an independent state in the southern part of Western Sahara and its integration of the remaining territory into Morocco. This plan was rejected by both Morocco and the Polisario Front. The diplomatic landscape around the settlement of the conflict has shifted in recent years. The United States under former President Donald Trump became 2020 the first country to recognize Morocco's sovereignty over the region. Israel's recognition came in July 2023, and Spain endorsed Morocco's autonomy plan in 2022. In 2024, France's formal recognition of the Kingdom’s autonomy proposal as the only basis for a political solution shifted the position of France as aligned with Morocco.
 Finally, Morocco was confirmed as one of the hosts for the 2030 FIFA World Cup, offering the country global visibility.
Main Political Parties
Multi-party system, consisting of numerous parties. Parties work with each other to form coalition governments. The main parties represented in the parliament include:

- National Rally of Independents (RNI): centrist, relatively inclined towards social liberalism. Was the leading party in the last elections, heads the ruling coalition
- 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
- People's Movement (MP): centrist, dominated by Berber (Tamazight) speakers, but without a distinct Berber agenda
- Socialist Union of Popular Forces (USFP): left-wing socialist
- Constitutional Union (UC): economically liberal, conservative on societal matters
- Justice and Development Party (PJD): moderate Islamist, was the ruling party between 2011-21
- Party of Progress and Socialism (PPS): socialist, formerly communist
- Democratic and Social Movement (MDS): social democracy, royalism
- Front of Democratic Forces (FFD): left-wing.
Executive Power
The executive power is shared between the government and the King. The Prime Minister serves as the 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 has deliberative power concerning the general policy of the State, international conventions, and the finance bill. The Council of Ministers, chaired by the King and formed by the head of government and ministers, is responsible for the strategic direction of the state policy, the revision of the Constitution, drafting of 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 of Morocco is bicameral, comprising the House of Representatives (395 members elected by direct universal suffrage for five years) and the House of Councillors (up to 120 members elected by indirect universal suffrage for six years, representing local authorities, professional chambers, and labor organizations). The Parliament votes on laws, and any bill must be successively examined by the two Houses. Legislative initiative is shared between members of Parliament and the government, with certain bills, such as finance bills, required to originate in the House of Representatives.
 

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