Morocco

Macroeconomic vulnerabilities have declined since 2012, but growth remains subdued and sensitive to volatile agricultural output. External imbalances are contained and fiscal consolidation resumed in 2017 after a pause in 2016. Job creation has improved but unemployment remains high, particularly among the youth. Social tensions increased in 2017, and in response, the authorities took steps to accelerate local social programs and investment projects. The government appointed in April 2017 remains committed to implementing sound policies and reforms have resumed. However, the outlook is subject to significant risks, including geopolitical risks in the region, weaker-than-expected growth in the euro area and delays in implementing key reforms. To achieve higher, sustainable, and more inclusive growth, reform implementation needs to accelerate, particularly in the areas of governance, the business environment, education, and the labor market.