Morocco Economy Overview

Morocco Economy Overview

Agriculture, mining (phosphate ore), industry and tourism are the pillars of the Moroccan economy. The food and chemical industries are also important. The clothing industry is struggling with cheap competition from Asia. Unequal distribution of wealth, deficiencies in the education system and unemployment hamper development.

Estimated GDP: US $ 118 billion (2020 estimate – GTAI)

Per capita income (purchasing power parity): US $ 8,805 (2020 estimate – GTAI)

Human Development Rank (HDI): Rank 121 of 189 (2019)

Proportion of poverty: Absolute: 1.5% Relative: 18% Subjective: 55% (ONDH)

Unequal distribution of income (Gini coefficient): 40.70 (UNDP 2016)

Economic Transformation Index (BTI): Rank 62 of 137 (2020)

Effects of the Covid-19 crisis

In his speech from the throne on July 29, 2020 Morocco, King Mohammed VI. announced that Morocco would build a comprehensive social security system over the next five years, with health insurance, pensions and unemployment compensation for all those in need. In addition, Mohammed VI. an extensive state funding program worth the equivalent of 11 billion euros for reconstruction after the corona crisis is promised.

From mid-March to June 2020, Morocco’s government had issued its first very radical “lockdown”, with total curfews and extensive closings of shops and public facilities. At the end of July 2020, several large cities were cordoned off again due to new cases of infection, and entry options for foreigners were severely restricted until the end of 2020. Due to Corona, GDP is expected to decrease by at least 5% in 2020. In addition, there are losses in agriculture due to periods of drought, so that the overall economic decline is likely to be even greater. The so-called informal sector is particularly affected by the Corona crisis. According to the Haut Commissariat au Plan (HCP), almost forty percent of the employees work here.

Basic data, indicators, statistics

In recent years, Morocco has recorded growth rates of over four percent. According to ezinereligion, foreign direct investment increased. This was particularly evident in residential construction, the automotive industry and transport infrastructure. The motorway network was expanded nationwide; a second terminal was added to the deep-sea port of Tanger Med in the north; almost all of the country’s major train stations have been modernized and enlarged. An ultra-high-speed train has been launched between Tangier, Rabat-Agdal and Casablanca: The so-called “Boraq”, the Moroccan version of the French TGV, is to serve other large cities in the future, including Marrakech and Agadir.

The rapid development seems to boundaries to push. Despite the visible modernization efforts, the economic and social situation of many people in Morocco is still characterized by unemployment and large income inequalities. According to the national observatory for human development ONDH, there are hardly any people in absolute poverty and the percentage of the poor (<1.9 dollars / day) has fallen sharply (from 15% in 2001 to around 1.5% in 2019 ). But according to the Oxfam organization, in rural Morocco, around fifty percent of the people only have $ 3 a day at their disposal, which is not even half of the statutory minimum wage. Around 20 percent of the population are considered to be at risk of absolute poverty. More than 60 percent of the population consider themselves poor. More than 80 percent state that their economic situation has not changed positively for years.

Morocco’s main exports are cars and cables. Phosphate products rank next, followed by textiles and agricultural products. Morocco’s trade balance is negative. Important import goods are machinery and equipment as well as fossil fuels (oil, gas, coal), followed by food.

Current information on the economic situation can be found at Germany Trade and Invest, the World Bank, the International Monetary Fund, the Foreign Office and the Economist Intelligence Unit (free of charge, but registration is required for background reports). The Moroccan Ministry of Planning keeps trends in the labor market and employment figures ready. The German-Moroccan Chamber of Commerce AHK in Casablanca publishes the Franco-German magazine “Bilatéral” once a quarter, which is put online free of charge with a slight delay. Those interested can order information about the presence of German companies in Morocco (hardcover and PDF) from the AHK Casablanca for a fee.

Morocco Economy Overview

Economic system

Formally, Morocco is a free market economy. However, due to the strong position of the royal family in the investment company Al Mada (Société Nationale d’Investissment SNI until 2018) and long-established elites, competition is distorted. Since King Mohammed VI came to power. the supremacy of the royal family in key sectors such as energy, agriculture, mining, retail, transport, and telecommunications has continued to grow, as an analysis by renowned business journalist Omar Brouksy shows.

At the same time, more and more Moroccans are relying on money transfers from abroad to survive. According to the World Bank, Morocco ranks second in the MENA region when it comes to remittances from abroad in absolute terms. To ensure social and political peace, the state distributes subsidies through the so-called ” Caisse de Compensation “: These have been reduced in recent years, from 5 billion euros to the equivalent of 1.2 billion euros in 2018. For 2020, a Announced increase to the equivalent of approx. 1.4 billion euros. Cooking gas, flour and sugar are currently subsidized and, since Corona, mouth-nose masks have also been non-medical. The national debt is increasing despite subsidy cuts and privatizations.