Morocco's economy is considered a relatively liberal economy governed by the law of supply and demand. Since 1993, the country has followed a policy of privatization of certain economic sectors which used to be in the hands of the government.
The economic system of the country presents several facets. It is characterized by a large opening towards the outside world. France remains the primary trade partner (supplier and customer) of Morocco. France is also the primary creditor and foreign investor in Morocco. In the Arab world, Morocco has the second-largest non-oil GDP, behind Egypt, as of 2005.
Since the early 1980s the Moroccan government has pursued an economic program toward accelerating real economy growth with the support of the International Monetary Fund, the World Bank, and the Paris Club of creditors. The country's currency, the dirham, is now fully convertible for current account transactions; reforms of the financial sector have been implemented; and state enterprises are being privatized.
The major resources of the Moroccan economy are agriculture, phosphates, and tourism. Sales of fish and seafood are important as well. Industry and mining contribute about one-third of the annual GDP. Morocco is the world's third-largest producer of phosphates (after the United States and China), and the price fluctuations of phosphates on the international market greatly influence Morocco's economy. Tourism and workers' remittances have played a critical role since independence. The production of textiles and clothing is part of a growing manufacturing sector that accounted for approximately 34% of total exports in 2002, employing 40% of the industrial workforce. The government wishes to increase textile and clothing exports from $1.27 billion in 2001 to $3.29 billion in 2010.
The high cost of imports, especially of petroleum imports, is a major problem. Another chronic problem is unreliable rainfall, which produces drought or sudden floods; in 1995, the country's worst drought in 30 years forced Morocco to import grain and adversely affected the economy. Another drought occurred in 1997, and one in 1999–2000. Reduced incomes due to drought caused GDP to fall by 7.6% in 1995, by 2.3% in 1997, and by 1.5% in 1999. During the years between drought, good rains brought bumper crops to market. Good rainfall in 2001 led to a 5% GDP growth rate. Morocco suffers both from unemployment (9.6% in 2008), and a large external debt estimated at around $20 billion, or half of GDP in 2002
Among the various free trade agreements that Morocco has ratified with its principal economic partners, are The Euro-Mediterranean free trade area agreement with the European Union with the objective of integrating the European Free Trade Association at the horizons of 2012; the Agadir Agreement, signed with Egypt, Jordan, and Tunisia, within the framework of the installation of the Arab Zone of Free Exchange; the US-Morocco Free Trade Agreement with United States which came into force in January 1, 2006 and lately the agreement of free exchange with Turkey.
In a statement ,released on july 2008, the IMF called Morocco "a pillar of development in the region" and congratulated King Mohammed VI and the Central Bank on Morocco's continued strong economic progress and effective management of monetary policy.
Morocco's economy is expected to grow by 6.5% in 2008, according to the Morrocan finance minister. While the forecast is slightly lower than the earlier 6.8% projected growth it still remains quite an achievement considering the circumstances. GDP growth in 2007 was only 2.2% due to a poor harvest caused by prolonged periods of drought; Morocco experienced nonagricultural GDP growth of 6.6 percent in 2007. Inflation is expected to reach 2.9% in 2008 due to the rising costs of energy. In an increasingly challenging global economic climate, the IMF expects continued nonagricultural expansion of the Moroccan economy.
The global financial crisis affected the Moroccan economy in only a limited way. Morocco may be affected, by the slowdown of international economy, stirred by the global financial crisis, and whose maximum impact on national economy could decrease the GDP growth rate by at least one point in 2009, according to the Bank Al-Maghrib.
In a report issued on july 2008, the IMF noted that Morocco's financial sector is sound and resilient to shocks, and that the remarkable fiscal consolidation efforts of recent years have allowed the Moroccan economy to absorb the impact of difficult international economic conditions and increasing global prices for essential commodities such as petroleum and energy. International economic experts recognize that Morocco's exemplary economic performance is beneficial not only to Moroccans, but also for the nearly 90 million people who live the Maghreb.