Country Report Morocco March 2009

Summary

The Economist Intelligence Unit expects the political scene to remain generally stable, with no serious challenges to the central role of the king, Mohammed VI.
Parliament will remain weak, with no party having a strong power base, and there will be widespread public disaffection with formal politics, particularly given the continued prominence of the monarchy in decision-making.
Poverty and rising unemployment will be sources of discontent, and many Moroccans will turn to Islamist political movements as a result, but only a small minority of Moroccans are likely to support militant groups.
Despite improved tax penetration, the budget deficit is expected to average 3.7% of GDP in 2009-10 as weaker GDP growth hits revenue and the government embarks on a major public investment programme.
We have lowered our forecast for real GDP growth because of the worsening outlook for the EUMorocco's main export marketalthough a strong harvest in 2009 will mean that Morocco just avoids recession.
We have adjusted our current-account forecast in the light of new trade data, but we still forecast that the current account will return surpluses in 2009-10, despite an expected decline in exports, as import costs plummet.

In February the UN's new envoy for Western Sahara, Christopher Ross, visited Morocco as part of a regional tour aimed at trying to restart negotiations between Morocco and the Polisario Front.
In mid-February government ministers, bankers and business leaders launched a revised development plan, Emergence II, detailing measures to boost the performance of the manufacturing sector over the next seven years.
The employers' and banking industry federations have signed a framework agreement to help cushion the impact of the global downturn on export-oriented industries, in particular textiles, leather and automobile equipment.
In mid-February government-set prices for various fuels were lowered by between 9% and 26%.
The economic downturn and consumer gloom in Europe has had an impact on the tourism industry. Although total visitor numbers rose by more than 6% in 2008, overnight stays fell by 2.6% and revenue per tourist fell by 9.3%.
The central bank's latest monthly survey of manufacturers' perceptions of the business climate suggests that Moroccan businesses are increasingly feeling the impact of the European recession on domestic production and exports.

Source: Country Report

This report covers the following industry codes:
SIC Code: 70
NAICS Code: 72