Economy - overview:
Economic policies pursued since 2003 by King Mohammed VI have brought macroeconomic stability to the country, improved financial sector performance, and made steady progress in developing the services and industrial sectors. The National Initiative for Human Development (INDH), a $2 billion initiative launched by the King in 2005, has improved social welfare through a successful rural electrification program, an overhaul of the tourism and agriculture sectors, and the gradual replacement of urban slums with decent housing. Despite the INDH's success, Morocco continues to grapple with a high illiteracy rate, a low education enrollment rate, and a high urban youth unemployment rate of around 30%. Moroccan exports have dropped sharply since mid-2008 as a result of the decline in global phosphates prices--the bulk of Moroccan exports by value--and the global economic slowdown. The economic slowdown in Europe--Morocco's main export market--also prompted a decline in the flow of foreign tourists and remittances, two primary sources of foreign currency. A record agricultural harvest, strong government spending, and domestic consumption, however, combined to partly offset losses from weak exports and helped GDP grow at a weak but positive 2.6% in 2009. Despite structural adjustment programs supported by the IMF, the World Bank, and the Paris Club, the dirham is only fully convertible for selected transactions. In 2006, Morocco entered a Free Trade Agreement (FTA) with the US, and in 2008 entered into an advanced status in its 2000 Association Agreement with the EU. Long-term challenges include improving education and job prospects for Morocco's youth, closing the income gap between the rich and the poor, confronting corruption, and expanding and diversifying exports beyond phosphates and low-value added products.

GDP (purchasing power parity):
$145.2 billion (2009 est.)