Morocco’s economy is set to face three major challenges in the coming years, according to Mathias Cormann, Secretary-General of the Organisation for Economic Co-operation and Development (OECD).
Speaking at a conference in Rabat on Wednesday, Cormann identified these challenges as boosting productivity, creating jobs, and addressing climate change and water scarcity.
According to an OECD study, Morocco’s economy is projected to grow by 4% next year, up from the 3.5% expected at the end of this year, driven by increased investment and strong exports.
However, Cormann said that addressing the long-term challenges is essential to further increase income and improve living standards.
The OECD study forecasts a continued decline in the budget deficit, from 4% this year to 3.5% in 2025, and a stabilization of government debt at around 70% of GDP, with inflation reaching the target of 2% next year.
To boost productivity, the OECD urged Moroccan authorities to increase the share of private investment and make greater efforts to combat corruption, noting that many Moroccan companies acknowledge paying bribes to facilitate certain activities.
Morocco’s labor market is characterized by a high share of the informal economy, with 67.6% of the workforce employed in the informal sector, according to OECD figures. Unemployment is also high among youth and women.
To address this, the study recommended reducing taxes and social security contributions, strengthening labor inspections, and improving education and women’s labor force participation.
The country is also vulnerable to rising temperatures and faces water stress.
While Morocco has set a target of achieving carbon neutrality by 2050, Cormann stressed the need for a comprehensive approach, including carbon pricing.
The study recommends gradually increasing water prices to encourage more efficient use of water resources.
Ahmed Reda Chami, President of the Economic, Social, and Environmental Council, suggested that Morocco could achieve a higher growth rate of 6% by fully leveraging its natural resources, including its extensive coastline, its digital economy, its geographical location, and its domestic market.
However, realizing Morocco’s economic potential requires the implementation of effective sectoral strategies and policies, as well as the creation of industrial working groups involving both the public and private sectors.
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