MOROCCO’S economic growth is expected to pick up gradually and average 3.3 percent over 2020–2021, mainly driven by more dynamic secondary and tertiary activities, bolstered by high foreign investments, according to IMF forecasts.
Significant FDIs continue to flow into Moroccan automotive industries, especially in the new Peugeot plant – that will eventually double the sector’s production capacity – as well as into logistics and trade services following the expansion of the Tangiers port, say World Bank analysts.
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Thanks to sound monetary policy and ample supply of fresh food, inflation is projected to average around 1% over the medium-term while the unemployment rate will slightly decline in 2019.
Morocco’s Non-agricultural growth will improve (3.4%in 2019 compared to 3% in 2018), driven by better performance of phosphates, chemicals, and textiles output.
According to the World Economic Outlook, private consumption will contribute the most to growth, boosted by higher salaries and low inflation. The report also cites the 2020 Budget which is expected to reflect the Government’s commitment to increase social spending financed by expanded efforts to mobilize revenue and controlling some recurrent expenditures. Subsidy policy will continue, especially for LPG (Liquefied petroleum gas) consumption.
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Morocco’s current account balance is also expected to gradually improve over the forecast period due to the growth of manufacturing exports – especially automobiles, agribusiness, electronics, and chemicals – and rising tourism receipts, supported by a price easing of the main imported commodities and goods.
But, the government has revised downward Morocco’s economic growth this year. It projects the economy to grow by 2.9% this year after 3% in 2018 as the economy continues to be affected by agricultural output, according to Finance Minister Mohamed Benchaaboun.
Growth however is seen recovering to about 3% in the upcoming two years, according to the World Economic Outlook, just as Standard and Poors rating agency has upgraded Morocco’s outlook from negative to stable citing budgetary measures to control the deficit and reduce spending.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.