Morocco - Overview
Arabs thus constitute about 40% of the population.
The day is punctuated by five prayer calls. During the month of Ramadan, the Moroccans fast, do not drink and smoke from sunrise to sunset.
To make a call from: 00
To make a call to: +212 + 6 for mobile phones or 212 + 5 for fix phones.
During the last few years, the Moroccan economy was been characterized by its macro-economic stability, along with low inflation and the booming of its economic growth. However, due to a decline in demand from the Euro-zone, the main market for Moroccan exports, together with the drought which affected its cereal production, the country's economic growth slowed down in 2012. In 2013, Morocco's economic growth rebounded (5.1%). Its economy profited from a good harvest and the increase of its domestic demand by 5%.
Morocco was strongly affected by the Euro-zone crisis since Europe is its main trading partner, the country has turned to the Arabic Gulf countries to attract investments. In March 2013, Morocco began negotiations to increase its economic integration in the European Union. In 2013, inflation increased (2.3%) due to an unpopular decision of indexing some petro-products in the global market. The recent reform on subsidizing daily consumption products was considered reticent. The IMF, which allocated a financial aid to Morocco in August 2013, appeals for improvement in the control of salaries and grants. These compensations had a cost of EUR 5 billion to the state in 2012 and they created a strain on the budgetary deficit. In 2013, the allocated budget for the compensation was not enough since prices had increased. Morocco has also engaged itself to invest into renewable energies in order to reduce its dependence on oil (95% of its current energy consumption). Oil and gas explorations have also been launched, many oil companies have invested in the drilling of these. The budget for 2014 aims to control its budgetary deficit and external accounts which have been downgraded. Exports are mostly driven by the aeronautic and automobile sectors (the automobile sector in particular, experienced an important progress in 2013). The budget for 2014 also plans a reform of the VAT, put an end to the exemptions on large agricultural operations and reforms on the retirement plan system.
Unemployment (9.1%) has been rising in the recent years and affecting particularly the young (15-24 years of age) and young graduates. The rate of poverty remains one of the highest in the Mediterranean region, with 15% of the population living under the poverty line. There are also great differences in the levels of development of the different regions.
Morocco has a relatively small amount of mineral resources, being phosphates its main wealth. Industry contributes to almost 30% of the GDP, thanks to the textiles, leather goods, food processing, oil refining and electronic assembling sectors. Nevertheless, new industry areas are also booming, thus trying to diminish the kingdom's dependence on its agricultural sector. These sectors are: chemical, automobile, computer, electronics and aeronautic industry.
The tertiary sector contributes around 55% to the GDP and depends exclusively on tourism, which remains very dynamic despite the slowdown produced by the attacks of September 11, 2001, those in Casablanca in 2003 and in Marrakesh in April 2011. Other than granting concessions for a lot of public services in the major towns, the country recently liberalized oil and gas exploration regulations. Calls for tender procedures have become increasingly more transparent.
Foreign trade overview
Morocco has an open economy, trade represents more than three-fourths of the GDP (average 2008-2010). Morocco's main trading partners are France and Spain. The country mainly imports crude oil, telecommunications equipment, wheat, gas and electricity. It mainly exports textiles, electrical components, fertilizers, citrus fruits and vegetables.
Morocco has a structural negative trade balance, which continues to deplete the kingdom's foreign exchange reserves. According to the Morocco's Foreign Exchange Office, the balance of goods and services showed a deficit of EUR 13 billion during the first three quarters of 2013, which represents 20% of the GDP. In 2013, imports were lower than in 2012 while the revenue from exports had a slight decrease.
The authorities are trying to address the trade deficit through a series of sectoral plans: "Emergence" for the industry, "Green Morocco (in French)" for agriculture and Morocco Export Plus, which aims to triple the volume of exported goods and services over the next ten years. It should be noted that free trade agreements have been signed with the United States, Turkey, Tunisia, Egypt and Jordan. In 2013, Morocco began its pursuit to increase its commercial integration with the European Union.
In recent years, Moroccan authorities have been successful in attracting a relatively consistent flow of foreign capital, mainly relying on the national privatization program, the conversion of foreign debt into investments and the operations of public services concessions. Other sectors have taken over, including banking, tourism, energy and industry. However, the level of FDI remains modest and could make a stronger contribution to the launching of the country's economy. Recently, many big groups have installed their operations in Morocco as well as the French companies Safran and Renault.
After a decline in 2009-2010 due to the global recession, FDI flows into Morocco began to rise again in 2011despite the context of the Euro-zone crisis and the revolutions of the "Arab Spring". In 2013, Morocco was the recipient of the largest amount of FDI in the Maghreb region and the country is classified among the top on the African continent. It is also important to note that the country went up eight places in the classification Doing Business 2014 issued by the World Bank in relation to its business climate (it ranks 87 out of 189 countries). France, Saudi Arabia and Spain are the three main investors. FDI is mainly concentrated in the real estate sector, followed by industry and tourism. The country's stability should attract investors. In addition, a vast project of economic modernization has been launched to boost FDI. Casablanca in particular, aims to become an international financial center.