publication April 16, 2018

Morocco's Economic Outlook - April 2018

GDP growth is projected to decline to 3% in 2018. Cereal production is projected to return to its historical average and non-agricultural GDP growth is expected to remain around 3% in the absence of more decisive structural reforms.

The fiscal deficit is expected to decline to 3.3% of GDP in 2018 in line with the government’s commitment to bring down the deficit to 3% of GDP by 2019-2021 and to reduce public debt to 60% of GDP by 2021. To achieve this target, it would be appropriate for the government to ensure a comprehensive tax reform including measures to reduce tax exemptions, lower corporate tax rates, improve public investment management, and better enforce tax payments by the self-employed and liberal professions. In line with this fiscal consolidation and oil price projections, the current account deficit is projected to remain below 4.5% of GDP in 2018.

Unemployment remained on an upward trend, rising from 9.9% in 2016 to 10.2% in 2017, especially prevalent among the young and the educated, as well as women (26.5%, 17.9% and 14.7% respectively), reflecting the weak capacity of the economy to generate inclusive growth.

International poverty estimates for Morocco are expected to be available in June 2018. Results based on the national poverty line indicate a sharp decline in poverty between 2001 and 2014. Poverty was at 15.3% in 2001 and declined to 8.9% in 2007 before dropping to 4.8% in 2014.