POLITICAL Over the course of the next year no serious political conflicts are expected to arise. King Mohammed VI will remain in power, and the monarchy will hold the most weight in political decision making. Morocco will place a significant amount of investment on stimulating economic growth, bettering education, improving infrastructure, and reducing unemployment over the coming years. ECONOMICAL Though Morocco is implementing tax improvements, its budget deficit is still expected to rise above 3% of GDP over the course of 2009-2010. This is due to slower GDP affecting revenue and government investment in public programs. Since the EU is Morocco’s biggest export market, Morocco’s predicted GDP growth has been lowered to 4% for 2009 and 4.5% in 2010. However, import spending will remain the same, if not reduced, as result of lower commodity prices. The maintained level of import spending will help the current account recover to a surplus by the end of 2010. Real GDP growth may weaken in 2009-10. The average of GDP growth over the next five years is expected to be 5% due to lower demand from the EU for Morocco’s exports and tourism industry. Extensive government subsidies on commodity products, as well as the anticipated reduction of international commodity prices, are expected to reduce consumer price inflation. Morocco’s main industries are tourism, textiles, and telecoms. However, agriculture and fishing still play major roles in sustaining the country’s economy. While agriculture is the source of almost 50% of Morocco’s employment, its yields are heavily vulnerable to the nation’s warm climate. Morocco is the third largest producer of phosphates in the world. As a key exporter of phosphates, price fluctuations of the resource have a direct impact on the Morocco’s economy. Since 2007 Morocco’s banking and insurance industries have demonstrated positive growth. Foreign ownership is increasing in the banking sector and the introduction of Islamic banking is expected in the near future. Morocco now has one of the largest insurance markets in the Arab World. The insurance sector is now consolidated and will be open to foreign competition from 2010.