Despite not possessing hydrocarbon wealth, the economy will remain a relative outperformer in North Africa over the medium term. Investor interest in the country as an export-oriented manufacturing hub for the European market and increasingly to West Africa, as well as relative security compared to the rest of the MENA region, will bode well for Morocco's underlying growth momentum in the next few years. The all-important agricultural sector will nevertheless remain exposed to weather, resulting in significant volatility in headline growth.
Morocco's foreign policy will remain stable over the coming years, aimed at strengthening its relationship with the EU and the GCC and looking to West Africa for trade and investment opportunities. The Western Sahara issue will remain at the forefront of Rabat's foreign policy agenda, and we do not see any significant progress taking place on this issue in the near future.
Morocco will underperform in North Africa in 2016, on the back of a lower than average harvest, which will significantly impact headline growth directly and indirectly through private consumption. We nevertheless maintain a positive outlook for improvements in the external sector, as the country will continue to attract a lot of interest from foreign investors. We forecast real GDP growth to reach 2.0% in 2016, well below the 4.4% estimated for 2015.
The gradual coming on-stream of new energy sources over the next five years - as part of the National Energy Plan 2020 - will reduce pressures on Morocco's current account and boost the country's attractiveness for foreign investors. This structural evolution will benefit the country's economic growth over the next decade.
Average annual inflation in Morocco will remain close to 1.6% over 2016, similarly to 2015, as rising food prices from a lower than expected harvest are compensated by a decrease in household demand. This will allow the Central Bank to maintain its current benchmark interest rate at 2.50% throughout the year.
Our forecasts for both economic activity and fiscal policy assume that Morocco will benefit from significant inflows of foreign direct investment and foreign aid from the Gulf Cooperation Council (GCC) and other organisations over the coming years. Should this fail to materialise, it would pose serious downside risks to the country's outlook.
The export sector remains highly vulnerable to any downturn in eurozone economic growth.
|Real GDP growth, % y-o-y||2.4||4.4||2.0||3.3|
|Nominal GDP, USDbn||109.9||100.5||106.5||117.3|
|Consumer price inflation, % y-o-y, eop||1.6||0.6||2.0||2.0|
|Exchange rate MAD/USD, eop||9.08||9.93||9.55||9.20|
|Budget balance, % of GDP||-4.4||-3.3||-3.1||-2.7|
|Current account balance, % of GDP||-5.5||-2.1||-1.8||-1.6|
The Morocco Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Morocco. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.
An influential new analysis of Morocco's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.
- Forecast the pace and stability of Morocco's economic and industry growth through end-2019.
- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
- Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.
- Contextualise Morocco's country risks against regional peers using BMI's country comparative Risk Index system.
- Evaluate external threats to doing business in Morocco, including currency volatility, the commodity price boom and protectionist policies.
BMI provides our fully independent 5-year forecasts for Morocco through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.
Economic Outlook Contents
The Morocco Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.
Key Areas Covered:
- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.
- BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.
- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).
- Balance of Payments - trade and investment, current and capital account.
- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).
- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.
- Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.
- Foreign Direct Investment - approvals, inflows and climate.
- External Debt - debt profile (short and long-term plus public and private sector obligations).
- Global Assumptions - forecasts for each year to end-2019 covering: major commodities, growth in key regions, inflation, and interest and exchange rates, in the United States, Japan, China and the eurozone.
- Rely upon BMI's 100% independent forecast scenarios for Morocco and underlying assumptions - we take no advertising and are privately-owned.
- Exploit the benefits of BMI's comprehensive and reliable macroeconomic database on Morocco, sourced and fully maintained by BMI from an extensive network of private sector, government and multilateral contacts.
- Gain key insights into the current and future direction of government economic policy, which could significantly affect your company's business prospects, from BMI's team of analysts and economists.
What are the political risks to doing business in Morocco over the next 5-years?
BMI's Morocco country Risk Index evaluates the short- and medium-term threats to political stability.
Political Outlook Contents
- SWOT Analysis for the Morocco Market - Political Strengths, Weaknesses, Opportunities and Threats facing Morocco.
- Political Stability and Risk Assessment - BMI's Risk Index assesses explicit short- and long-term risks to political stability; latest positioning and trends for Morocco's risk are compared with regional and global averages.
- Current Administration and Policy-making BMI assesses the threats to the continuity of economic policy, and likely changes to the business operating environment.
- Long-Term Political Outlook BMI examines the structural risks to the stability of Morocco’s political system and the dominant public policy issues likely to affect decision-makers, and outlines scenarios for how the state could evolve in the medium to long term.
- Benchmark Morocco's risk profile against its neighbours, the global and regional average, allowing easy comparison of risks between key business markets.
- Identify, evaluate and anticipate political and security risks to the business environment, and to your company's current operations and future plans.
- Gain valuable insights into government and policy-making, through BMI's specialist team of analysts and economists, and their network of private and public sector sources.
What are the current operational risks and difficulties associated with doing business in Morocco?
The Operational Risk section gives an evaluation of current risks and difficulties associated with operating in the market. It also provides a brief overview of the regional Operational Risk Index which benchmarks Morocco against its neighbours.
Operational Risk Contents
The chapter provides a summary of the main threats in the country, within:
- Labour Market Risk (Education; Availability of Labour; and Labour Costs)
- Logistics Risk (Market Size and Utilities; Quality and Extent of the Transport Governance)
- Trade and Investment Risk (Economic Openness; Government Intervention; and Legal Risks)
- Crime and Security Risk (Crime; Terrorism; and Interstate Conflict risks).
The report also drills down in greater depth to address key issues in one of the following segments most critical to the market:
- Transport network, economic openness, cost and availability of labour, crime risks, bureaucratic environment, market size and utilities, and interstate conflict.
- Assess your company’s exposure to country specific operational and business risks, using BMI’s insight on the current dangers of operating in the market.
- Evaluate Morocco’s risk profile against its regional peers, helping you understand the market’s strengths and weaknesses in relation to other countries.