Morocco anticipates economy will improve and stabilise in 2020

Moroccan authorities remain very optimistic that the economy will achieve a growth rate of 3.5% in 2020.
Sunday 26/01/2020
A ship moored at terminal I of the Tanger Med port in Tangiers. (AFP)
Lucrative environment. A ship moored at terminal I of the Tanger Med port in Tangiers. (AFP)

RABAT - Indicators suggest reforms have strengthened the Moroccan economy and pushed growth to sustainable levels that create an attractive business climate for foreign investment and economic stability.

Moroccan authorities said they remain very optimistic that the economy would achieve a growth rate of 3.5% in 2020, a significant increase over 2.7% growth in 2019. They also said they expect growth of 3.6% in 2021 and 3.8 % in 2022.

A World Bank report in mid-January said price reforms in Morocco and changes in energy subsidies contributed to improving the business climate in the country and achieving project goals.

The International Monetary Fund (IMF) said the Moroccan economy had maintained balance despite weak growth of its largest trading partners, high external risks and fluctuations in the cereal production sector.

The IMF reported that Rabat demonstrated a commitment to important structural financial reforms that helped its economy to cope with external shocks and achieve higher and more inclusive growth.

“Morocco has the lowest inflation rate in the whole of its (economic) environment and the increase in the cost of living for its citizens is minimal annually, despite the context of an irregular growth rate globally,” said Moroccan Prime Minister Saad Eddine El Othmani.

Othmani pointed out that the government placed the country’s growth rate for 2019 at 3.4%, while it expects growth of 3.7%-3.9% for the current year.

He called for “pursuing the major reforms, supporting social policies, giving a new impetus to investment and supporting the private initiative with the aim of increasing growth and creating job opportunities, which is one of the priorities that falls within the government’s priorities for the remainder of its mandate.”

Reforms in the hydrocarbon sector include reducing volume of subsidies to avoid the serious effects that could result from the deterioration of purchasing power.

The World Bank said Rabat, moved to announce prices of petroleum products and committed to gradually liberalise most energy products. The World Bank indicated that the reforms were implemented without producing social unrest and the budget savings were used to finance other reforms.

Morocco’s High Commission for Planning announced that the country’s economy was expected to achieve estimated growth of 3.3% during the first quarter of 2020, compared to the 2.5% rate during the same quarter of 2019.

Growth was predicted to occur significantly in the services sector (3.3%), while the agricultural sector was expected to grow 2.8% and the industrial sector 2.3%. Agricultural value was said to increase about 6.8% because of adequate rainfall in agricultural areas, official statistics indicated.

The agricultural sector in Morocco is seeing improvement in segments focused on cultivation of cash crops, such as cereals, legumes and hay, while autumn crops, such as citrus, were expected to see some reduction.

The High Commission for Planning said external demand for Moroccan agricultural products was expected to rise 3.1% and internal demand would continue its upward trend. That was said to be because of improvements in supply of agricultural products and increase in purchasing power of families.

The Institute of International Finance predicted that positive tourism activity would continue to support economic growth of oil importers, including Morocco, while agricultural production will have a lesser effect because of weak global demand, particularly in the European Union.

The World Bank stressed that political reforms and flexible tourism activity would support growth in Morocco of 2.2% in 2020. The World Bank report projected that the tourism sector, supported by government promotion efforts, would continue to support economic activity.