In April 2022, the number of new COVID-19 infections were at their lowest level since the beginning of the pandemic. Morocco's free, nationwide vaccination campaign was launched in January 2021. By March 1, 2022, 64% of the Moroccan population, including close to 100% of those over 60, were fully vaccinated (with two vaccine doses), compared to a 40% average for the Middle East and North Africa region as a whole. The Kingdom has announced the start of its own vaccine production for July 2022.
The government is also moving ahead with the reforms that were announced in the economic recovery plan that launched in July 2020 and featured prominently in the New Development Model (NDM), unveiled in May 2021. These included the reform of State-Owned Enterprises and the universalization of access to public health insurance and to family allowances, which is a cash transfer program. In addition, the Mohammed VI Fund has been created to catalyze private investments through: (i) equity investments in viable Small- and Medium-Sized Enterprises (SMEs) operating in strategic sectors (agriculture, tourism, manufacturing, innovation, and growth); (ii) Public Private Partnerships to finance commercial infrastructure projects.
On the economic front, GDP growth rebounded to 7.4% in 2021 after contracting by 6.3% in 2020. This rebound was driven by an exceptional cereal crop after two consecutive years of drought (agricultural value-added grew by 19%), supportive macro-economic policies, solid manufacturing exports, a surge in remittances, and progress on COVID-19 vaccination. However, the Moroccan economy is currently undergoing a double shock: a severe drought plus the impact of the war in Ukraine and its impact on commodity and energy prices. As a result, growth is projected to decelerate to 1.1% in 2022 and the current account deficit to widen to 5.5% of GDP as energy and food import bills rise. The budget deficit is expected to reach 6.2% of GDP, due to higher butane gas and flour subsidies and to the cost of health and social protection reforms.
Although inflation remained contained throughout most of 2021 (1.4% on average), imported cost-push price pressures emerged toward the end of the year and are intensifying in 2022. As a result the Consumer Price Index (CPI) posted a 3.6% yearly increase in February 2022. Despite these inflationary pressures, monetary policy remains accommodative, and the central bank has kept the policy rate unchanged at 1.5% since June 2020, its historical low.
Last Updated: May 11, 2022