2017 Index of Economic Freedom

Morocco

overall score61.5
world rank86
Rule of Law

Property Rights55.0

Government Integrity37.1

Judicial Effectiveness41.9

Government Size

Government Spending69.4

Tax Burden71.7

Fiscal Health55.0

Regulatory Efficiency

Business Freedom67.7

Labor Freedom33.8

Monetary Freedom82.7

Open Markets

Trade Freedom84.0

Investment Freedom70.0

Financial Freedom70.0

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Quick Facts
  • Population:
    • 33.5 million
  • GDP (PPP):
    • $273.5 billion
    • 4.5% growth
    • 4.0% 5-year compound annual growth
    • $8,164 per capita
  • Unemployment:
    • 9.6%
  • Inflation (CPI):
    • 1.6%
  • FDI Inflow:
    • $3.2 billion
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Morocco continues to make gradual but notable progress in economic liberalization. The country is benefiting from a commitment to economic reforms that encourage a dynamically evolving private sector. Policies that facilitate competitiveness and diversification of the productive base have contributed to economic expansion averaging around 4 percent annually over the past five years. However, a large segment of the labor force remains marginalized because of inflexible labor regulations.

Although Morocco is a strong reformer in the area of private-sector development, overall progress will depend on the government’s willingness to confront long-standing challenges that require deeper reforms, particularly in connection with the rule of law.

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Background

Morocco, a constitutional monarchy with an elected parliament, has been a key U.S. ally in the struggle against Islamist terrorism. Following popular protests in 2011, constitutional amendments proposed by a commission authorized by King Mohammed VI and approved by referendum were adopted to increase the power and independence of the prime minister and provide greater civil liberties. The king retains significant power as chief executive, however. In addition to a large tourism industry and a growing manufacturing sector, a nascent aeronautics industry has attracted foreign investment.

Rule of LawView Methodology

Property Rights 55.0 Create a Graph using this measurement

Government Integrity 37.1 Create a Graph using this measurement

Judicial Effectiveness 41.9 Create a Graph using this measurement

The rates of land titling and land rights registration are low, although the 2016 World Bank Doing Business survey reported that new procedures have been put in place to speed property transfers. The judiciary is not independent of the palace, and the courts are regularly used to punish government opponents. Officials engage in corrupt practices with impunity. Corruption is a serious problem throughout government and law enforcement.

Government SizeView Methodology

The top individual income tax rate is 38 percent, and the top corporate tax rate is 30 percent. Other taxes include a value-added tax and a gift tax. The overall tax burden equals 22.0 percent of total domestic income. Government spending has amounted to 31.9 percent of total output (GDP) over the past three years, and budget deficits have averaged 4.8 percent of GDP. Public debt is equivalent to 63.7 percent of GDP.

Regulatory EfficiencyView Methodology

Procedures for setting up and registering a private business have been streamlined in recent years. Despite some improvement, labor market rigidity continues to discourage dynamic employment growth. The elimination of fuel subsidies in 2015 provided critical fiscal space, but the government is likely to maintain subsidies on basic goods such as flour and sugar in the interest of preserving social stability.

Open MarketsView Methodology

Trade is important to Morocco’s economy; the value of exports and imports taken together equals 81 percent of GDP. The average applied tariff rate is 3.0 percent. Foreign and domestic investors are generally treated equally under the law. The financial sector is competitive, and there is an ongoing campaign to increase modernization and transparency. The Casablanca Stock Exchange does not restrict foreign participation.

Country's Score Over Time

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Regional Ranking

rank country overall change
1United Arab Emirates76.94.3
2Qatar73.12.4
3Israel69.7-1.0
4Bahrain68.5-5.8
5Jordan66.7-1.6
6Kuwait65.12.4
7Saudi Arabia64.42.3
8Oman62.1-5.0
9Morocco61.50.2
10Tunisia55.7-1.9
11Lebanon53.3-6.2
12Egypt52.6-3.4
13Iran50.57.0
14Algeria46.5-3.6


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