Economic and Political Overview

flag Morocco Morocco: Economic and Political Overview

In this page: Economic Outline | Political Outline

 

Economic Outline

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, Latest data available.

Note : (E) Estimated data

 

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 data available.

 

Find more information about your business sector on our service Market Reports.

Indicator of Economic Freedom

Definition:

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.

Score:
63,3/100
World Rank:
81
Regional Rank:
9

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

Business environment ranking

Definition:

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.

Score:
5.48/10
World Rank:
61/82

Source: The Economist Intelligence Unit - Business Environment Rankings 2020-2024

 

Country Risk

See the country risk analysis provided by Coface.

 

Return to top

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.
Type of State
Morocco is a constitutional monarchy with an elected parliament.
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.
 

Indicator of Freedom of the Press

Definition:

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.).

World Rank:
136/180
 

Indicator of Political Freedom

Definition:

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.

Ranking:
Partly Free
Political Freedom:
5/7
Civil Liberties:
5/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

Return to top

Any Comment About This Content? Report It to Us.

 

© eexpand, All Rights Reserved.
Latest Update: March 2025