World Bank Report Highlights Moroccan Economic Resilience Amid Global Challenges

According to the World Bank’s latest economic monitor for the country, Morocco's real output increased by 3.4 percent in 2023.

Despite facing numerous obstacles, including a global economic slowdown, inflationary pressures, and the Al Haouz earthquake, Morocco's economy has demonstrated notable resilience. According to the World Bank's latest economic monitor for the country, Morocco's real output increased by 3.4 percent in 2023.

This growth was driven by a rebound in tourism, strong performance in export-oriented manufacturing sectors like automobiles and aeronautics, and a resurgence in private consumption. Supportive macroeconomic policies, including public sector expansion and fiscal consolidation strategies, have further bolstered this economic acceleration. Morocco has also experienced a substantial increase in foreign direct investment and a reduction in the current account deficit to its lowest level since 2007.

However, challenges remain. Firms and households continue to grapple with recent shocks, evidenced by rising business insolvencies and a labor market that lost 200,000 jobs in rural areas in 2023 despite overall economic acceleration. Per capita consumption has only recently approached pre-pandemic levels, and a new social aid program is expected to support the most vulnerable households. For 2024, economic growth is projected to decelerate to 2.9 percent due to a weak agricultural campaign, although non-agricultural GDP is expected to remain resilient.

"This report underscores the critical role of productivity in enhancing economic growth and living standards, aligning with the New Development Model (NDM) and Morocco's long-term inclusive development vision," said Ahmadou Moustapha Ndiaye, World Bank Maghreb and Malta Country Director. "Recent progress includes the operationalization of the Competition Council, amendments to the Competition Law, and a landmark antitrust settlement with fuel distributors. To sustain these advancements, ongoing support for small and medium-sized enterprises will be crucial."

The report features a special chapter focusing on the Moroccan private sector, highlighting productivity performance and the need to address constraints to improve job creation. Based on a comprehensive analysis with the Moroccan Observatory of Small and Medium Enterprises, the report emphasizes the importance of micro-level data in understanding productivity trends and shaping policies to enhance private sector performance.

Titled "Unlocking the Potential of the Private Sector to Spur Growth and Job Creation," the report stresses the need for a dynamic business environment that fosters innovation and resource reallocation toward more productive firms. It also notes that Morocco's predominance of small firms and micro-enterprises, which struggle to grow, contributes to insufficient job creation for its expanding workforce. The report outlines the challenges and policy measures necessary to boost productivity and growth in the formal private sector.