Assessment of the Health of Moroccos Economy, 2005 2011

By Samuelson Jones

December 20, 2012 A.P. Macroeconomics Mr. Khalil Sharpstown International School

Introduction

In this paper I will be assessing the health of Moroccos economy. The question to be answered is: What do key macroeconomic indicators reveal about the health of this countrys economy since 2005? I will also be looking at all the different aspects of Moroccos GDP and other data to determine at what point from the year 2005 to 2011 was the countrys economy the healthiest. I chose to do this topic because its a unique project that will get me ready for not only college but for my career in the future. The fascinating thing about this topic is that I got to use real data from a real country and interpret the data to create graphs and find other information of Moroccos economy. This is why I chose to do this project.

Outline
Analysis of data In this section I will be analyzing all the data and writing a summary of the graph. The summary will include some trends on the graph and high and low points of the graph. Conclusion In the conclusion section I will summarize the whole project. It will include what I found out about the Moroccan economy. This section will also summarize the point at which the economy was the strongest and the weakest. Appendix The Appendix will include all Tables that were used in creating my graphs.

ANALYSIS OF DATA

Graph 1 Gross Domestic Product

Norm inalGD Pvs. Real GD P Morocco,2 005 - 2011

$120,000

$100,000

$80,000

$60,000

$ S U f s n o l i B
$40,000 $20,000 $2005 2006 2007 2008 Y ea r Nom inal GDP (Millions current US$) Real GDP (Million current US$) 2009 2010 2011

Source : World Bank

Graph 1 show that Moroccos nominal GDP grew from $59,524 billion in 2005, to $100,221 billion in 2011. When you take the price level of goods into account it proves the nominal GDP to be some what true. The Real GDP increased significantly from $ $59,524 billion in 2005 to $ $88,691 billion in 2011. It also shows a fast rate of economic growth.

Graph 8 Total Population

Graph 8 shows that there was a steady increase in the population from 2005 to 2010. The population increased by almost 2million from 30,392,473 in 2005 to 32,272,974 in 2011.

Graph 9 Growth Rate of Real GDP and Population

Graph 9 Illustrates the relationship between Growth rate of Real GDP and Population. From 2005 to 2008 the consumer purchasing power increased because the economy was in an expansion stage. However the Growth rate of Real GDP slowed down significantly in 2009 and took Morocco into a recession in 2010 decreasing purchasing power. The population stayed fairly the same throughout 2006 to 2011 at around 1%.

Graph 3 Real GDP Per-Capita

Real GD P Per-Capita Morocco,2005 - 2011

$30,000

$25,000

$20,000

$ S U , 5 0 2 t i p a C r P D G l a e R

$15,000

$10,000

$5,000

$2005 2006 2007 2008 Yea rs Real GDP Per-Capita 2009 2010 2011

Source : World Bank

Graph 3 illustrates that the Real GDP Per-Capita grew from $19,585 in 2005 to $27,482 in 2011. From 2009 to 2010 Real GDP per- Capita decreased from $26,125 to $25,603. The overall Real GDP Per-Capita indicates that the standard of living was increasing extremely well over the years.

Graph 4 Growth Rate of Real GDP Per-Capita

GrowthRate of Real GD P Per-Capita Morocco,2005 - 2011

14%

12%

10%

t i p a C P D l f e a R h t w o r G

8%

6%

4%

2%

0%

-2%

-4% 2005 2006 2007 2008 Yea r Growth Rate of Real GDP Per-Capita 2009 2010 2011

Source : World Bank

Graph 4 shows that the growth rate of Real GDP Per-Capita increased from 6% in 2006 to 12.7% in 2008. The growth slowed down to .3% in 2009 and declined to -2% in 2010. So the standard of living was terrible between 2009 and 2010 when the country was heading for a recession.

Graph 6 Unemploymet Rate

Graph 6 shows that the unemployment rate decreased overall from 11% in 2005 to 10% in 2010. This indicates that the countrys economy might be experiencing an expansion. Also the unemployment rate is fairly close to Moroccos natural unemployment rate 9.6% which indicates that Morocco is near full employment.

Graph 5 GDP gap

GD Pg ap Morocco,2 005 - 2011

5% 5%

4%

4%

3%

p a g P D G

3%

2%

2%

1%

1%

0% 2005 2006 2007 2008 Year GDP gap 2009 2010 2011

Source : World Bank

Graph 5 shows that the GDP gap was very low. From 2005 to 2010 the GDP gap decreased from 1.15% to 1.4%. This indicates that Morocco potential output between 2005 to 2010 decrease. The GDP was at its lowest 1.0% in 2008. So the economy must have been on a contraction from 2005 to 2010. (The Natural Rate of Unemployment is 9.6)

Graph 7 Consumer Price Index

Graph 7 shows that the consumer price index has increased from 100 in 2005 to 113 in 2011. This tells us that the price increased for the market basket for consumer goods and services from 2005 to 2011. So the consumers had to pay 13% more in 2011 than they had to pay in 2005. The change in the CPI over time is a low of only 13%.

Graph 10 Inflation Rate

Graph 10 shows that generally inflation rates slowed down from 3% in 2006 to less than 2% in 2011. The inflation rates were at the highest at 3.8% in 2008 and at the lowest .9% from 2009 to 2010. Inflation rates were pretty low except for 2008 when it was 3.8%.

Analysis of Key Economic Indicators, 2005 2011

In this section I will be comparing the four indicators of Moroccos economy. The four indicators are the Growth Rate of Real GDP, Growth Rate of Real GDP percapita, Unemployment Rate and Inflation Rate. After comparing the four indicators I will have to predict at which point from 2005 2011 was the economy the healthiest.

Table 1 Key Economic Indicator Morocco, 2005 2011 Growth Rate of Real GDP 2005 2006 2007 2008 2009 2010 2011
Source: World Bank

Growth Rate of Real GDP PerCapita 6.0% 11.3% 12.7% 0.3% -2.0% 7.3%

7% 12% 14% 1% -1% 8%

Unemployment Rate 11 9.7 9.7 9.6 10 10

Inflation Rate 3% 2% 4% 1% 1% 2%

Graph 11 Key Economic Indicators

K eyEconom icIndicators Morocco,20 05 - 2011

16% 14%

12%

10% Growth Rate of Real GDP Inflation Rate Growth Rate of Real GDP Per-Capita Unemploym ent, total (%of total labor force)

8%

6%

h C g a t n c r e P

4%

2%

0%

-2%

-4% 2005 2006 2007 2008 Yea r 2009 2010 2011

Source : World Bank

From 2006 to 2007 the Economy was experiencing an expansion because the both the growth rate of real GDP and the growth rate of real GDP per-capita were high. Unemployment was at its natural rate at 9.6% and inflation rates were decreasing. However the economy was contracted from 2008 to 2009 and went into

a recession shortly after 2009 into 2010. This is because the growth rate of real GDP and growth rate of GDP per-capita was negative between -1% and -2%. Also unemployment levels rose to 10%.

During this period from 2005 to 2011 the ecnomy was the healthiest at 2007. This is because the Inflation rates were very low at 2% and the economy was at full employment. Also the growth rate of real GDP and growth rate of real GDP percapita were both high with growth rate of real GDP at 12% and growth rate of real GDP per-capita at 11.3%. At this period Morocco was experiencing an expansion.

- This picture shows the time when Moroccos economy at its peak. Trading and business with other countries was prosperous.

The economy was at its unhealthiest in 2010. In 2010 the unemplyment rate was at 10% which is sought of ok. The growth rate of real GDP per-capita was -2% and the growth rate of real GDP was at -1%. How ever the inflation rate was still at 1% from the previous year 2009. All this proves that the economy was the unhealthiest at this point and also in a recession or contraction.

- This picture shows the time when Moroccos economy was in a recession and people took to the streets to protest

Production Possibility Frontier for Morocco 2005-2011

Key: E C B 2007 A CPR GDP6 DE2010 F2011 D F A-2006 B-

2008

2009

PR GDP1

Conclusion
In conclusion the objective of this paper was to assess the health of Moroccos economy from 2005 to 2011 and I believe I successfully illustrate that in my paper. The Moroccan economy was generally strong from 2005 to 2007 and at its worst in 2010 when Morocco went into a recession. I came to this conclusion after examining all the graphs especially the Key Indicator Graph.

Appendix
Table 2 Nominal GDP Morocco 2005- 2011
Nominal GDP (Millions current US$) $ 59,524 $ 65,637 $ 75,226 $ 88,883 $ 90,908 $ 90,803 $ 100,221

Year 2005 2006 2007 2008 2009 2010 2011

Source: World Bank

Growth Rate 9.3% 12.7% 15.4% 2.2% -0.1% 9.4%

Table 3 Real GDP Morocco 2005- 2011

Year 2005 2006 2007 2008 2009 2010 2011

Real GDP (Million Growth Rate current US$) of Real GDP $ 59,524 $ 63,725 7% $ 71,644 12% $ 81,544 14% $ 82,644 1% $ 81,805 -1% $ 88,691 8%

Source: World Bank

Table 4 Real GDP Per-Capita Morocco 2005- 2011

Growth Rate of Real GDP Year Real GDP Per-Capita Per-Capita 2005 $ 19,585 2006 $ 20,756 6.0% 2007 $ 23,103 11.3% 2008 $ 26,035 12.7% 2009 $ 26,125 0.3% 2010 $ 25,603 -2.0% 2011 $ 27,482 7.3%
Source: World Bank

Table 5 GDP gap Morocco 2005- 2011

Year 2005 2006 2007 2008 2009 2010 2011

Source: World Bank

GDP gap 1% 1% 1% 1% 1% 1% 0%

Table 6 Unemployment Rate Morocco 2005- 2011

Year 2005 2006 2007 2008 2009 2010 2011

Source: World Bank

Unemployme nt, total (%of total labor 11% 10% 10% 10% 10% 10%

Table 7 Consumer Price Index Morocco 2005- 2011

Year 2005 2006 2007 2008 2009 2010 2011

Consumer Price Index 100 103 105 109 110 111 113

Growth Rate 3.0% 1.9% 3.8% 0.9% 0.9% 1.8%

Source: World Bank

Year

Table 8 Total Population Morocco 2005- 2011

G rowth Total Rate of Population Total Population 2005 30,3 92,473 2006 30,7 02,084 1.02% 2007 31,0 11,199 1.01% 2008 31,3 21,453 1.00% 2009 31,6 34,524 1.00% 2010 31,9 51,412 1.00% 2011 32,2 72,974 1.01%

S ource: World Bank

Table 9 Inflation Rate Morocco 2005- 2011

Inflation Rate 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1
S ource: World Bank

3 % 2 % 4 % 1 % 1 % 2 %