Despite various obstacles, including a slowdown in the global economy, an inflation shock, and the Al Haouz earthquake, the Moroccan economy has shown resilience and has accelerated with real output increasing by 3.4 percent in 2023," the Washington-based institution pointed out Thursday in a release, adding that the kingdom's economic growth is projected to decelerate to 2.9 percent this year.

This report "highlights the crucial role of productivity in enhancing a country's economic growth and standard of living, in alignment with the New Development Model (NDM) and Morocco's long-term inclusive development vision," said Ahmadou Moustapha Ndiaye, World Bank Maghreb and Malta Country Director, as quoted in the release.

"The country has made significant progress recently, including the operationalization of the Competition Council, amendments to the Competition Law, and a landmark antitrust settlement with fuel distributors. To build on these advancements, and as highlighted in the NDM, continued efforts will need to be made, particularly in support of small and medium-sized enterprises," he underlined.

Growth was driven by a rebound in tourism, strong performance in export-oriented manufacturing sectors such as automobiles and aeronautics, and a resurgence in private consumption, the Bretton Woods institution said, adding that "supportive macroeconomic policies, including public sector expansion and fiscal consolidation strategies, have contributed to this economic acceleration."

"Morocco has also seen a substantial increase in foreign direct investment, which present significant development opportunities, and a decline in the current account deficit to its lowest level since 2007."

However, the Moroccan economy "faces challenges as firms and households struggle to recover from recent shocks, evidenced by a rise in business insolvencies and a labor market that lost 200,000 jobs in rural areas in 2023 despite the economic acceleration," the financial institution noted.

Per capita consumption has barely returned to pre-pandemic levels, and a new social aid program is expected to aid the most vulnerable households, said the World Bank, which expects Morocco's economic growth to decelerate to 2.9 percent due to a weak agricultural campaign, while non-agricultural GDP would remain resilient.