Given Morocco’s relatively high unemployment rate, the authorities are stepping up efforts to reform the education system and the labour market.
The government, under pressure to create jobs and boost investment in low-income areas , is trying to maintain its focus on fiscal consolidation to achieve a fiscal deficit of 3% of GDP in 2018—the official target.
On the revenue side, the authorities are working on improving tax collection and broadening the tax base, but have also introduced a gradual reduction of corporate tax rates in 2018.
Domestic wheat production is set to be roughly on a par with last season’s record outturns, which will help to sustain agricultural activity in 2018, but not drive any further growth.
Strong domestic and external demand—notably in the automotive sector along with tourism, will remain major driver of the economy, driven by the current cyclical upturn in the euro zone and sustained growth in arrivals from non-traditional markets.
In May food prices suffered a sharp increase, mainly due to a peak in prices of wheat and maize. This spike could be related to Ramadan extraordinary demand. While prices have not exceeded the seasonal expectation, the situation is to be monitored carefully.