Politics cloud positive Moroccan economic outlook

Subject

Effect of politics on the economy.

Significance

Morocco’s main sources of foreign exchange showed healthy increases across the board in 2017, according to the most recent balance of payments data released in January. However, these positive indicators have been overshadowed by a cloudy political outlook. An intervention by Abdelilah Benkirane, the charismatic former prime minister, has created ructions both within his Justice and Development Party (PJD) and it its governing coalition with five other parties.

Impacts

• Political squabbling plays into the hands of the king: it presents the palace as the most stable and effective institution.
• However, the devaluation of parliamentary politics could further erode trust in the system, and swell the ranks of protest movements.
• The political wrangling undermines the government’s economic policy and could sabotage positive investor sentiment.