The economic development in Morocco continues to rebound from the COVID-19 pandemic and the energy crisis, despite the 2023 earthquake and repeating droughts. Growth has proven resilient while inflation is declining, and Morocco has now embarked on major reforms to encourage investment and enhance social protection.
The OECD Economic Survey of Morocco forecasts GDP growth of 3.5% in 2024, in line with 3.4% in 2023, before increasing to 4.0% in 2025, supported by increasing investment and robust exports. As Morocco's budget deficit narrows, the public debt-to-GDP ratio is expected to narrow gradually, from 69.5% in 2023 to 68.9% in 2024 and 68.2% in 2025. Inflation, which has declined as global pressures on food prices have eased, is expected to drop from 6.1% in 2023 to 2.3% in 2024, and 2.0% in 2025.
Morocco benefits from its openness to trade and foreign direct investment (FDI), but domestic private investment is low and linkages with the local economy should be strengthened. The new Investment Charter (Charte de l'Investissement) is supporting new private sector investment by combining a new system of investment incentives with improvements in governance and efforts to improve business conditions.
"Today's launch is a great occasion, marking three milestones in our co-operation: launch of the first OECD Economic Survey of Morocco, conclusion of the second phase of our OECD-Morocco country programme, and signature of a Memorandum of Understanding to continue supporting Morocco in achieving its economic growth and development objectives," OECD Secretary-General Mathias Cormann said, alongside Morocco's Head of Government Aziz Akhannouch and Minister of Economy and Finance Nadia Fettah. "Morocco has embarked on an ambitious journey to improve living standards for its people and to foster economic development to accelerate the convergence with high-income economies. Boosting productivity through higher investment and private sector dynamism, tackling labour market challenges to enable more high-quality job creation and advancing the climate transition are all policy priorities that will help Morocco on its journey."
While labour productivity has been increasing in Morocco, addressing widespread informality by strengthening incentives to work in the formal economy alongside stricter enforcement would help raise business' performance. Productivity would be lifted by further upskilling the labour force, increasing the efficiency of public investment, strengthening competition and ensuring a level playing field among all firms, while stepping up efforts to tackle corruption.
Labour force participation for women and young people are low. More high-quality formal jobs and higher labour-force participation are needed to raise living standards. Stronger efforts to provide work-based vocational training and apprenticeships, and a continued implementation of reforms to the education system would provide necessary skills, facilitate labour market entry of graduates and would help make the most of Morocco's young population. Helping women to better balance work and care responsibilities by extending childcare and tackle gender stereotypes would support their labour market integration.
Morocco has made an ambitious commitment to reducing carbon emissions by 45% by 2030 compared to 2010 and to net zero by 2050. Implementing the envisaged climate transition measures, including a broad-based approach to carbon pricing and taxation backed by regulations and supports at a sectoral level, will be important to achieve these targets. Water is increasingly scarce as average rainfall in Morocco has declined. Gradually raising water prices to reflect the cost of providing it and its scarcity would encourage a more efficient use of water.
The Economic Survey of Morocco was prepared as part of the second phase of the OECD-Morocco Country Programme. Today's event also marked completion of the second phase of the Country Programme, which has successfully supported the implementation of Morocco's New Development Model, and included a signing ceremony for signature of a Memorandum of Understanding to continue supporting Morocco in achieving its economic growth and development objectives. The OECD also presented key findings of its OECD National Urban Policy Review of Morocco, which provides an action plan to build more productive, sustainable and inclusive cities.
