Morocco, an example of resilience in the face of global challenges
In a context of global uncertainty, Morocco has managed to stand out for its economic resilience. Despite a global economic slowdown, an inflationary shock and the Al Haouz earthquake, the Moroccan economy has shown remarkable perseverance. According to the World Bank's latest economic report, the country's real output increased by 3.4% in 2023, consolidating its position as one of the most dynamic economies in the region.
As the World Bank press release reports, growth has been driven by a recovery in tourism, strong performance in export-oriented manufacturing sectors such as automotive and aeronautics, and a resurgence in private consumption. Supportive macroeconomic policies, including public sector expansion and fiscal consolidation strategies, have contributed significantly to this economic acceleration. In addition, Morocco has seen a substantial increase in foreign direct investment, presenting important development opportunities, and a reduction in the current account deficit to its lowest level since 2007.
However, the Moroccan economy faces challenges, as both businesses and households struggle to recover from recent events. This is evidenced by a rise in business insolvencies and a labour market that lost 200,000 jobs in rural areas in 2023, despite economic acceleration. Per capita consumption has barely returned to pre-pandemic levels, and a new social assistance programme is expected to benefit the most vulnerable households. Looking ahead to 2024, economic growth is projected to slow to 2.9% due to a weak agricultural season, although non-farm GDP is expected to remain resilient.
"This report highlights the crucial role of productivity in improving a country's economic growth and living standards, in alignment with Morocco's New Model of Development (NMD) and long-term inclusive development vision," said Ahmadou Moustapha Ndiaye, World Bank country director for the Maghreb and Malta. "The country has made significant progress recently, including the operationalisation of the Competition Council, amendments to the Competition Law and a landmark antitrust agreement with fuel distributors. To build on these advances, and as highlighted in the NMD, continued efforts will be needed, particularly in support of small and medium-sized enterprises".
The report includes a special chapter on the dynamics of the Moroccan private sector, highlighting its productivity performance and the need to address constraints to improve job creation. It is based on an analysis conducted jointly with the Moroccan Observatory of Small and Medium Enterprises, which exploits a comprehensive database of formal enterprises.
Entitled "Unlocking the potential of the private sector to drive growth and job creation", the report underlines the importance of micro-level data for understanding productivity trends and shaping policies for private sector performance in Morocco. It highlights the need for a dynamic business environment that encourages innovation and reallocation of resources towards more productive firms to boost productivity growth. Furthermore, it notes that the predominance of small and micro enterprises in Morocco, which are struggling to grow, contributes to insufficient job creation for its expanding workforce. The report details the challenges and policy measures needed to improve productivity and growth in the formal private sector.
In addition, the paper notes that the predominance of small and micro enterprises in Morocco, which face difficulties in growing, contributes to insufficient job creation for its growing labour force. The report details the challenges and policy measures needed to boost productivity and growth in the formal private sector.
Despite the challenges, Morocco has demonstrated a remarkable ability to overcome adversity and remain on a growth trajectory. With a focus on improving productivity and continued support for small and medium-sized enterprises, the country is well positioned to make further progress towards inclusive and sustainable economic development.