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Economy of Morocco
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Economy of Morocco
Morocco has a developing market economy. Since 1993, in line with many Western world changes, it has followed a policy of privatisation. Morocco is the 6th largest African economy by GDP (PPP) and seventh-highest GDP in the Arab world, despite not being an energy-producing country. Over the period 1971 and 2024, Morocco had annual GDP growth of 4.13% and per-capita GDP growth of 2.33%.
The economic system of the country demonstrated resilience to the climate, commodity, and pandemic shocks of the early 2020s. Since the early-1980s, the Moroccan government has pursued an economic programme toward accelerating economic growth with the support of the International Monetary Fund, the World Bank, and the Paris Club of creditors. From 2018, the country's currency, the Moroccan dirham, is fully convertible for current account transactions; reforms of the financial sector have been implemented; and state enterprises are being privatised.
The services sector accounts for just over half of the GDP. The industry sector– consisting of mining, construction and manufacturing – is an additional quarter. The sectors that recorded the highest growth are the tourism, telecommunications, and textile sectors. Morocco, however, still depends to an inordinate degree on agriculture, which accounts for around 11.1% of GDP but employs 26.6% of the Moroccan population. With a semi-arid climate, it is difficult to assure good rainfall and GDP growth varies depending on the weather. Fiscal prudence has allowed for consolidation, with both the budget deficit and debt falling as a percentage of GDP. The major resources of the Moroccan economy are agriculture, phosphate minerals, and tourism. Sales of fish and seafood are important as well. Industry and mining contribute about one-third of the annual GDP. Morocco is the world's third-largest producer of phosphates (after the United States and China), and the price fluctuations of phosphates on the international market greatly influence Morocco's economy. Tourism and workers' remittances have played a critical role since independence.
The high cost of imports, especially of petroleum imports, is a major problem. Morocco suffers both from structural unemployment and a large external debt. The youth unemployment rate was 27.2% in 2021. About 80% of jobs are informal and the income gaps are very high. In 2022, Morocco ranked 120th out of 191 countries in the world on the Human Development Index (HDI), behind Algeria (93rd) and Tunisia (101st). It is the most unequal country in North Africa according to the NGO Oxfam.
Morocco is a fairly stable economy with continuous growth over the past half-century. Current GDP per capita grew 47% in the 1960s, reaching a peak growth of 274% in the 1970s. However, this proved unsustainable and growth scaled back sharply to just 8.2% in the 1980s and 8.9% in the 1990s.
In recent years, Morocco's economy has demonstrated resilience amid global challenges. Real GDP growth rebounded to 3.4% in 2023, driven by a resurgence in tourism, robust manufacturing exports (notably in the automotive and aeronautics sectors), and increased private consumption. However, agricultural output contracted due to drought conditions, which lead to a projected slowdown in overall growth to 3.2% in 2024. The IMF anticipated growth to accelerate to approximately 3.9% in 2025, supported by infrastructure projects and structural reforms.
Inflation significantly declined from a peak of 10.1% in early 2023 to an average of 1.5% in 2024, primarily due to falling food prices. In response, the central bank, Bank Al-Maghrib, reduced the key interest rate from 3.0% to 2.75% in June 2024. The IMF projected inflation to stabilize around 2% in the medium term.
Fiscal consolidation efforts led to a reduction in the budget deficit, which decreased from 5.2% of GDP in 2022 to 4.7% in 2023. Public debt was projected to gradually decline from 69.5% of GDP in 2023 to 68.2% by 2025. The current account deficit narrowed significantly to 0.6% of GDP in 2023, the lowest level since 2007, bolstered by strong tourism revenues, manufacturing exports, and remittances. Foreign direct investment also increased, particularly in sectors like green hydrogen and electric vehicle battery components.
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Economy of Morocco
Morocco has a developing market economy. Since 1993, in line with many Western world changes, it has followed a policy of privatisation. Morocco is the 6th largest African economy by GDP (PPP) and seventh-highest GDP in the Arab world, despite not being an energy-producing country. Over the period 1971 and 2024, Morocco had annual GDP growth of 4.13% and per-capita GDP growth of 2.33%.
The economic system of the country demonstrated resilience to the climate, commodity, and pandemic shocks of the early 2020s. Since the early-1980s, the Moroccan government has pursued an economic programme toward accelerating economic growth with the support of the International Monetary Fund, the World Bank, and the Paris Club of creditors. From 2018, the country's currency, the Moroccan dirham, is fully convertible for current account transactions; reforms of the financial sector have been implemented; and state enterprises are being privatised.
The services sector accounts for just over half of the GDP. The industry sector– consisting of mining, construction and manufacturing – is an additional quarter. The sectors that recorded the highest growth are the tourism, telecommunications, and textile sectors. Morocco, however, still depends to an inordinate degree on agriculture, which accounts for around 11.1% of GDP but employs 26.6% of the Moroccan population. With a semi-arid climate, it is difficult to assure good rainfall and GDP growth varies depending on the weather. Fiscal prudence has allowed for consolidation, with both the budget deficit and debt falling as a percentage of GDP. The major resources of the Moroccan economy are agriculture, phosphate minerals, and tourism. Sales of fish and seafood are important as well. Industry and mining contribute about one-third of the annual GDP. Morocco is the world's third-largest producer of phosphates (after the United States and China), and the price fluctuations of phosphates on the international market greatly influence Morocco's economy. Tourism and workers' remittances have played a critical role since independence.
The high cost of imports, especially of petroleum imports, is a major problem. Morocco suffers both from structural unemployment and a large external debt. The youth unemployment rate was 27.2% in 2021. About 80% of jobs are informal and the income gaps are very high. In 2022, Morocco ranked 120th out of 191 countries in the world on the Human Development Index (HDI), behind Algeria (93rd) and Tunisia (101st). It is the most unequal country in North Africa according to the NGO Oxfam.
Morocco is a fairly stable economy with continuous growth over the past half-century. Current GDP per capita grew 47% in the 1960s, reaching a peak growth of 274% in the 1970s. However, this proved unsustainable and growth scaled back sharply to just 8.2% in the 1980s and 8.9% in the 1990s.
In recent years, Morocco's economy has demonstrated resilience amid global challenges. Real GDP growth rebounded to 3.4% in 2023, driven by a resurgence in tourism, robust manufacturing exports (notably in the automotive and aeronautics sectors), and increased private consumption. However, agricultural output contracted due to drought conditions, which lead to a projected slowdown in overall growth to 3.2% in 2024. The IMF anticipated growth to accelerate to approximately 3.9% in 2025, supported by infrastructure projects and structural reforms.
Inflation significantly declined from a peak of 10.1% in early 2023 to an average of 1.5% in 2024, primarily due to falling food prices. In response, the central bank, Bank Al-Maghrib, reduced the key interest rate from 3.0% to 2.75% in June 2024. The IMF projected inflation to stabilize around 2% in the medium term.
Fiscal consolidation efforts led to a reduction in the budget deficit, which decreased from 5.2% of GDP in 2022 to 4.7% in 2023. Public debt was projected to gradually decline from 69.5% of GDP in 2023 to 68.2% by 2025. The current account deficit narrowed significantly to 0.6% of GDP in 2023, the lowest level since 2007, bolstered by strong tourism revenues, manufacturing exports, and remittances. Foreign direct investment also increased, particularly in sectors like green hydrogen and electric vehicle battery components.
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