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Economy

Morocco's Economic Resilience Tested: Mixed Sector Performance in Q2 2024

Tuesday 01 - 15:00

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Morocco's economy faced a challenging landscape in the second quarter of 2024, with growth slowing to 2.4%, down from 2.5% in the same period last year. This slight deceleration masks significant shifts across various sectors, painting a complex picture of the nation's economic health.

Primary Sector Struggles

The primary sector experienced a notable contraction, with seasonally adjusted added value shrinking by 5%, a stark reversal from the 1.2% growth seen in Q2 2023. This decline was driven by:

- A 4.5% drop in agricultural output, contrasting with 1.5% growth the previous year
- A steep 14.7% fall in the fishing industry, following a 4.5% decrease in 2023

Secondary Sector Rebound

In a positive turn, the secondary sector showed signs of recovery:

- Overall added value rose by 3.8%, rebounding from a 2.4% decline
- The extraction industry surged by 23.6%, a dramatic turnaround from a 9.6% drop
- Construction and public works expanded by 3.6%, reversing a previous 2.4% decline
- Manufacturing saw a 2.9% increase, up from a 1.6% decrease

However, the electricity and water sector faced challenges, with a 6.3% decline compared to 0.8% growth in Q2 2023.

Tertiary Sector Slowdown

The tertiary sector experienced a deceleration, with growth easing to 3.1% from 5% in Q2 2023:

- Accommodation and food services growth slowed significantly to 9.3% from 32.8%
- Transportation and warehousing growth decreased to 5.1% from 6.9%
- Research, development, and business services grew by 3.8%, down from 4.4%
- Education, health, and social services growth declined to 2.7% from 4.8%
- Real estate services growth fell to 2% from 3.2%
- Financial and insurance services growth dropped to 0.9% from 3.1%
- Information and communication services growth shrank to 0.5% from 4.2%

Some areas showed resilience:
- Public administration and social security services grew by 3.6%, up from 3.3%
- Trade and vehicle repair services improved, rising by 1.9% from 0.9%

Domestic Demand and Foreign Trade

Domestic demand saw a significant improvement, rising by 5% compared to just 0.1% growth in Q2 2023. This surge contributed 5.2 percentage points to economic growth, a substantial increase from 0.01 points the previous year.

Foreign trade presented a mixed picture:
- Imports surged by 12.9%, up from 0.2% growth in 2023
- Exports rose by 7.8%, compared to 5.5% in the previous year
- The net effect of foreign trade was a negative contribution of 2.9 percentage points to overall economic growth, contrasting with a positive contribution of 2.5 points in Q2 2023

Economic Indicators and Projections

- GDP at current prices grew by 3.6%, down from 9.8% in Q2 2023
- The general price level increased by 1.2%, a significant drop from 7.3% in Q2 2023
- Gross national income growth slowed to 3.7% from 9.3%
- National savings stood at 32.1% of GDP, slightly lower than 32.4% a year earlier
- Gross investment accounted for 33.2% of GDP, up from 31.7%

Looking ahead, the European Bank for Reconstruction and Development projects 2.9% growth for Morocco's economy in 2024, while Bank Al-Maghrib anticipates a slight decline to 2.8% by year-end, followed by a rebound to 4.4% in 2025.

This comprehensive analysis reveals a Moroccan economy navigating through sectoral challenges while showing resilience in certain areas. As the nation continues to adapt to global economic pressures, the coming quarters will be crucial in determining the trajectory of its economic recovery and growth.