Morocco: Economic and Political Overview
In this page: Economic Outline | Political Outline
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) | 144.44 | 157.09 | 168.60 | 180.60 | 193.20 |
| GDP (Constant Prices, Annual % Change) | 3.4 | 2.8 | 3.6 | 3.4 | 3.4 |
| GDP per Capita (USD) | 3,901 | 4,204 | 4,471 | 4,746 | 5,034 |
| General Government Balance (in % of GDP) | -4.6 | -4.3 | -3.9 | -3.3 | -3.3 |
| General Government Gross Debt (in % of GDP) | 69.5 | 68.7 | 68.0 | 66.9 | 66.2 |
| Inflation Rate (%) | 6.1 | 1.7 | 2.3 | 2.3 | 2.2 |
| Unemployment Rate (% of the Labour Force) | 13.0 | 13.4 | 12.6 | 12.1 | 11.6 |
| 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, Latest data available.
Note : (E) Estimated data
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 data available.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024
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The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House
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