Morocco Economic Outlook
- The Moroccan economy proved resilient in 2013 with a growth rate of 4.7%, buttressed mainly by domestic consumption and public investment, but also by a good agricultural year.
- The reforms that have been underway for several years in favour of the private sector were strengthened in 2013 by a fiscal reform and the continuation of the reform of the compensation fund, which represents a key step in reducing public spending.
- Morocco has invested in consistent sectoral strategies to accompany the reforms undertaken since the early 2000s, which helped accelerate the economy’s structural transformation and promote new products. New industries, such as aeronautics and automobiles, are now drivers of growth and areas of innovation for the Moroccan economy. These areas can help Morocco overcome the difficulties encountered by certain traditional sectors such as textiles.
The Moroccan economy consolidated its growth in 2013 with GDP rising 4.7% compared to 2.7% in 2012, despite the slowdown in world growth. This was due to a vibrant agricultural sector, in particular, with non agricultural activities somewhat less dynamic, compared to 2012. Overall goods exports were down by 4% because of a decline of almost 28% in exports of phosphates and their derivatives. The only exports to benefit from the recovery of external demand were capital goods, in particular electric cables and wires.
Sound macroeconomic and fiscal management continued into 2013. A cautious monetary policy held
inflation at 1.9% and the current account deficit at 7.2% of GDP, compared to 10% in 2012, while foreignexchange reserves reached 4.5 months of imports of goods and services. The fiscal deficit, however, reached 5.3% of GDP. In response, the government undertook corrective measures to improve revenue collection and lowered public investment for 2014 with a view to bringing the fiscal deficit down to 3% of GDP by 2016. It should also be noted that the reform of the compensation fund and the application of an indexation system for petroleum products will be needed to achieve that objective.
Overall, Morocco’s performance has been encouraging and benefited from a context of political and
social stability. The business environment has improved and the country has moved up eight places in
the annual World Bank Doing Business report, climbing from 95th to 87th in one year. In addition, 2013
was marked by improved tourism revenue (+2%), transfers from Moroccans living abroad and a significant increase in foreign direct investment (+20%).
Despite these positive results and the overall economic improvement, Morocco has not been able to
solve the problem of youth unemployment (ages 15-24), which reached 19.1% in 2013. For 2014, Morocco is going to continue to implement its reform programme (subsidies, taxation, retirement, social protection and the fiscal system), with two objectives:
- To improve the efficiency of public finances; and
- To support the development of an inclusive growth model supported by the private sector and that generates jobs for young people.
Morocco has invested in targeted sectoral strategies to accompany these reforms and to accelerate the
transformation and diversification of its economy, leading to more employment creation. The National Pact for Industrial Emergence (PNEI, 2009-15) aims to revive the industrial sector and to boost its competitiveness, and is thus an important framework for launching industries in which Morocco can be considered more competitive. From this perspective, the objective of creating 220 000 new jobs seems feasible for 2015. The new aeronautical and automobile industries represent an important source of economic growth and innovation for Morocco.