Economic growth of 6 per cent is predicted for 2001 marking a
significant improvement on the previous year when severe drought
inflicted intense agricultural recession and a reduction in
agricultural output which had a massive impact in a country with one
of the richest agricultural sectors in the Arab world. A positive
forecast for current growth comes from the Arab Monetary Fund which
assessed the economic performances of nine Arab countries and
concluded that Morocco was top. With its rich arable lands and natural
resources such as the sub-Saharan region and the Rif Mountain, it is
unsurprising that agriculture has played a dominant role in the
economy, although it is diversifying increasingly into areas such as
tourism, manufacturing and fishing. In contrast to the agriculture
sector, tourism, construction, mining and telecommunications are
forecast for growth.
In budget proposals for the coming year approved by the country's
parliament the main features are a 4.5 per cent target GDP growth, two
per cent average inflation and three per cent deficit. A further
devaluation of the currency in the first half of 2002 was not ruled
out. The Dirham was last devalued in April in a successful bid to
boost exports to its large European markets. In addition, total
expenditure is estimated at $15 billion with $6 billion in public
sector investment. Some privatisations have been delayed, but the
government still expects $1.1 billion in privatisation revenues in
2002, although this will represent a decrease of 41 per cent on 2001
when such revenues totalled $2.3 billion. A large public sector wages
bill accounts for almost 50 per cent of all government expenses, but
this is being balanced out by strong privatisation revenues. Foreign
Direct Investment (FDI) is estimated to top $3.2 billion for 2001, a
figure significantly boosted by privatisation. Another positive
economic sign is the steady reduction in both rural and urban
unemployment figures over the past year.
Imports/Exports
Tourism is one of the country's main sources of hard currency and has
been a major growth sector with the majority of visitors coming from
Europe. Between January-September 2001 the number of European tourists
rose 43 per cent on the previous year. Tourism contributed 8.5 per
cent to the GDP. In total 2.5 million foreign tourists visited the
country bringing it a record $2 billion. The government has ambitious
plans to quadruple visitors within the next ten years which is
stimulating major investment in construction projects for hotels and
tourist resorts. In the aftermath of September 11 the plans remain in
place and Morocco is "determined to carry on investments in this vital
sector to attract more visitors in the future," Finance Minister
Fathallah Oualalou stated.
International Ties
The country has held membership of the WTO since 1995; and also has an
association agreement with the EU, a vital relationship since two
thirds of the country's trade is conducted within the euro zone. Its
links agreement with the EU presents Morocco with an opportunity to
construct a strong manufacturing base in partnership with
international firms and impact of the EU is expected on standards of
technology and production quality. A revival of the Arab Maghreb Union
with the possible benefit to the economy in closer relations with
Algeria. Then there was the development of a further trade association
in the Arab-Mediterranean free trade zone between Morocco, Tunisia,
Egypt and Jordan in May 2001. It was decided to extend it to Algeria,
Libya, Mauritania, Syria, Lebanon and Palestine.
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