Poverty & Equity Brief October 2024 MOROCCO In the last two decades, Morocco managed to significantly reduce poverty, consistently across national and international poverty lines. Between 2001 and 2013, Morocco experienced significant poverty reduction from a national rate of 15.5 to 4.8 percent, thanks to dynamic economic growth and generous social policies, translating into improvements in quality and access to basic services. Likewise, when measured with the new international lines (2017 PPP), the decline was also sharp. However, progress in the reduction of consumption inequality has been disappointing since 2000, with the Gini coefficient stagnating around 0.4 and underscoring the need for more inclusive growth. Based on a small pilot Household Budget Survey (HBS), the High Planning Commission (HCP) estimated that poverty at the national level had decreased to 1.7 percent in 2019, while the GINI coefficient dropped to 0.385. Since 2019, a series of consecutive shocks led to the sharp deterioration of households’ welfare. The analysis produced by the National Statistics Institute based on a panel collected following the new HBS (2019) suggests that in 2020 poor households were disproportionately affected by the COVID-19 pandemic, the most vulnerable operating in the urban, informal sector. A severe and persistent drought affecting domestic production and farmers revenues, coupled with the food and energy price rise generated by the conflict in Ukraine, led to a further deterioration of living conditions and food security through 2023. A recent publication issued by the national statistical office (NSO) that makes use of the most recent official household survey (2022/23, not publicly available) suggests that poverty in 2023 stood at 3.9 percent, only 1 percentage point below the level of 2013/14. Over this period, spatial inequalities have also deepened, with consumption contracting only by 1.6 percent among the top 20 percent in urban areas, against -4.6 percent for the bottom 20 percent in rural areas. As a result, the Gini coefficient rose .405 higher than in 2014. In 2024, Morocco is expected to see further reduction in poverty and vulnerability, mainly due to a modest increase in per-capita GDP driven by lower inflation, particularly in food prices, and compounded by increased urban labor income, with salary raises for civil servants and robust performance in urban service and industrial sectors. Importantly, while the rollout of a new cash transfer program has been crucial in supporting vulnerable populations in the last couple of years, especially in rural areas, progress remains insufficient as the economy has a limited capacity to create inclusive employment. The interactions between the social protection reform as it unfolds and the existing and forthcoming policies to boost job creation will need to be monitored to maximize their potential for inclusive and sustainable growth in the future. $2.15 Poverty Rate $6.85 Poverty Rate Gini Index Prosperity Gap 2013 2013 2013 2013 1.4% 42.1% 39.5 3.8 Poverty Rate Inequality 70 70 60 60 50 50 Poverty Rate (%) Gini Index 40 40 30 30 20 20 10 10 0 0 2000 2005 2010 2000 2005 2010 $2.15 Poverty Rate $3.65 Poverty Rate $6.85 Poverty Rate Gini Index Poverty at Different Lines Poverty Line Number of Poor Rate Year (Thousands) (%)   National Poverty Line 1,460.9 3.9 2022         International Poverty Line ($2.15/day) 487.8 1.4 2013         Lower Middle Income Class Poverty Line ($3.65/day) 3,298.9 9.8 2013         Upper Middle Income Class Poverty Line ($6.85/day) 14,232.6 42.1 2013         Multidimensional Poverty Measure   5.8 2013         Group and Multidimensional Poverty Poverty by Group Poverty Rate (%) Multidimensional Poverty Components (% of Pop.)   Urban population 3.6 Daily income less than US$2.15 per person 1.4 Rural population 19.0 At least one school-aged child is not enrolled in school 6.8 Males 9.8 No adult has completed primary education 12.7 Females 9.7 No access to limited-standard drinking water 8.7 0 to 14 years old 13.0 No access to limited-standard sanitation 12.9 15 to 64 years old 8.6 No access to electricity 2.4 65 and older 7.7 Without education (16+) 12.8 Primary education (16+) 8.7 Secondary education (16+) 4.7 Tertiary/post-secondary education (16+) 1.2 Note: Data for the "Poverty by Group" table is derived from a 2013 survey and data for the "Multidimensional Poverty Components" table is derived from a 2013 survey. The rates in the "Poverty by Group" table above are shown at the $3.65 lower-middle income line. "N/A" denotes a missing/removed value, while "N/A*" refers to a value which was removed due to having fewer than 30 observations. Poverty Data & Methodology Poverty and inequality estimates in Morocco are produced by the High Planning Commission (HCP). A nationally representative household survey (ENCDM) is conducted approximately every seven years. National and regional poverty rates are published after each survey round. In 2013/14, the welfare aggregate was based on a consumption expenditure measure that included food, education, health, housing-related expenditures, communications, transportation, clothing, entertainment, and an estimate of rental values for the household’s dwelling. The welfare aggregate was not spatially or temporally deflated for poverty measurement but was spatially adjusted using poverty lines for calculating the Gini index. Two poverty lines in Dirhams (MAD) per person per year were estimated and used to calculate the official poverty rates: urban areas (MAD 4,667) and rural areas (MAD 4,312). In PPP, the average line was equivalent to about $2.9. Since then, HCP has collected a 2,500 households panel survey and, between March 15, 2022, and March 14, 2023, the fourth ENCDM. Based on a representative sample of 18,000 households, HCP updated its poverty and vulnerability numbers. However, these data and the methodological details on the update of the poverty indicators are not yet publicly available. Harmonization The numbers presented in this brief are derived from the MNAPOV database. The standardization and harmonization process are overseen by the Middle East and North Africa Team for Statistical Development. MNAPOV was established in 2014, and encompasses a range of data, including demographics, education, asset ownership, access to services, employment, and household expenditure, all of which are utilized for Global Poverty Monitoring. MNAPOV includes data from 11 countries. Work is ongoing to improve the coverage of countries in the region, expand the list of harmonized variables, and enhance the dissemination of poverty, inequality, and prosperity estimates for the MENA region. The terms of use for the data comply with agreements made with the original data producers. Middle East & North Africa Poverty Economist: Federica Marzo