THE ECONOMY
The year 2006 proved to be a prosperous one for the Moroccan kingdom, with real GDP reported at 46 billion euros growing some 7.3%. Average economic growth was 4.7% between 2001 and 2006, compared with 3% to 3.5% in the 1990s. Morocco was ranked 59th in world rankings for GDP out of 181 countries by the International Monetary Fund. The service sector is the key to the economy accounting for 55.5% of the overall GDP, increasing from 49.9% in 1990.
There is also an undeniable improvement in Moroccans’ standard of living, evidenced by a surge in car sales and mortgages. The state planning commission (HCP) recently announced that the number of jobless people in Morocco – a country of 30 million – had just dropped below the one-million mark for the first time in 13 years. Officially, unemployment now stands at 7.7% of the active population, as opposed to 11.1% a year ago, this level is similar to most western economies. Around the same time, Finance Minister Fathalah Oualalou declared the number of people living in extreme poverty – surviving on less that one dollar a day – had fallen to 14% in 2005, or 4.2 million people, from 16.5% in 1997.
Good rains in 2006 produced growth in the agricultural sector, which remains key to the Moroccan economy, though competition from Egypt and Turkey is increasing in that sector. Mining and other energy activity slowed, however, with less refining and electricity production. Construction continued to show strong growth based on infrastructure upgrades, foreign investment and tourism developments, while the stock exchange registered healthy growth over 2005, particularly in the real estate sector. Increasing consumer demand is also driving growth in construction-related industries.
Tourism, transport and telecoms all registered strong growth in 2006 as well. Growing consumer demand in the domestic market has been helping to boost the economy, due in part to higher rural productivity and a tightening job market. Confidence in the local market has also grown, with a substantial increase in consumer credit. Both foreign and local investment continued to rise in certain sectors and unemployment fell as more jobs were created in the service, construction and industry sectors.
Exports rose to Turkey and the US, as Morocco has free trade agreements with the two countries. The government also took measures to decrease the numbers of civil service employees in 2006, introducing voluntary retirement and making fiscal reforms, including the new Finance Law, thus improving efficiency while also investing heavily in infrastructure and other projects.
Tax collection also improved. Revenues from privatisation and state-owned monopolies fell short of projections however and reduced tariffs also resulted in less revenue, although government revenues improved overall. The authorities have also taken measures to improve transparency and the availability of financial data to further encourage investors.
Growth is expected to continue under the Vision 2012 programme, as agriculture becomes less important and other sectors, industry in particular, are expected to become stronger. Energy and mining activities are likely to bounce back in 2007, though overall growth should slow somewhat.
For more info please contact us:
Propertyzonedirect's Blog 