FACTBOX: Morocco's economy: Trade, tourism check poverty
(Reuters) - Moroccans voted on Friday in the second parliamentary elections of King Mohammed's reign. Here are the main facts about the North African country's economy.
GROWTH
Gross domestic product grew 8.1 percent in 2006 due to the best grain harvest in a decade. The outlook for industry is the brightest in many years as clothing makers fend off competition from Asian producers and multinationals farm out back-office and call-centre operations to new business parks in Morocco.
TRADE
Unlike neighboring Algeria, Morocco has no large energy reserves and wants to become a regional trade and manufacturing hub to profit from its proximity to Western Europe, its biggest export client by far.
The country sells clothes, fish, chemicals, phosphates, transistors, iron ore, manganese, fruit and vegetables abroad, but its biggest sources of foreign currency are rapidly-growing tourism and funds sent home from Moroccans living abroad.
The trade deficit grew 22 percent to 57.5 billion dirhams ($7.01 billion) in the first half of 2007 but the current account surplus surged 72 percent, boosted by remittances.
INVESTMENT
Foreign direct investment (FDI) increased to 21 billion dirhams on average per year from 2000 to 2005 from 5 billion annually in the 1990s as the business climate slowly improved. FDI reached a record in 2006.
INFLATION
Consumer prices rose 3.3 percent in 2006, above a government forecast and the highest level in 10 years, because of high oil prices and rising food costs, slowing to 2.1 percent in the first seven months of 2007.
BUDGET
The time of big privatizations is over but public finances are improving thanks to more efficient tax collecting, better debt management and a streamlined state payroll. The government foresees a budget deficit of 2.7 percent this year.
CHALLENGES AHEAD
Drought and desertification: Rainfall has declined, making life harder for Moroccan farmers.
Poverty: Around 40 percent of the population lives in poverty despite successive government job creation drives.
Unemployment: Officially the rate has fallen from 14 percent in 1999 to around 10 percent but is 20 percent in some areas.
Corruption: The country's position in a global corruption table has worsened in recent years, according to Transparency International's local affiliate.
Drugs: The U.N. Office on Drugs and Crime says an eradication program and drought have slashed Morocco's multi-billion-dollar cannabis crop, the biggest in the world, but hashish still dominates the rural economy near Tangier.
Education: The system turns out too many generalists trained for public sector jobs and not enough engineers, scientists and managers. The government aims to double the number of engineers qualifying each year to 10,000 by 2008.
Sources: government High Planning Commission, ministries, Transparency Maroc, U.N. agencies.
