Morocco's Q3 2024 Economic Pulse: Industrial Boom Offsets Agricultural Decline
Morocco's economy showed resilience in the third quarter of 2024, with growth reaching 2.8%, up from the 2.4% average recorded in the first half of the year. This uptick, reported by the High Commission for Planning (HCP), stems from a continued recovery in domestic demand and a robust increase in exports, which boosted value across most sectors.
The industrial sector emerged as a standout performer, with extractive industries experiencing a remarkable 15.4% annual growth. This surge was primarily driven by a rebound in raw material exports and sustained demand from local processing industries. National phosphate exports, along with derivatives, saw significant growth, benefiting from reduced Chinese supply and the launch of new production capacities for Di-Ammonium Phosphate (DAP) and Triple Super Phosphate (TSP).
Manufacturing industries gained momentum, contributing an additional 0.2 percentage points to overall economic growth. Textiles and certain agro-industry sectors recovered due to rising foreign sales, while chemical industries maintained a solid 9.7% growth, supported by lower import prices for sulfur and ammonia.
The construction sector also showed improvement, recording a 4.8% year-on-year growth in value, up from 3.6% in the previous quarter. This growth was driven by a rebound in building activity and stronger public works, amid stable production prices.
However, not all sectors shared in this positive trend. The service sector continued to experience a slowdown in growth, a pattern persisting since mid-2023. While tourism and transportation maintained strong performance post-COVID, sectors like commerce, financial services, and communication faced a cyclical slowdown in 2024 due to weakening demand.
The agricultural sector faced significant challenges, with a 4.1% decline in its value-added in Q3 2024, following a 4% contraction in the first half of the year. This underperformance returned the sector to its average quarterly level from four years earlier, with contrasting trends between plant and animal production. Despite unfavorable weather conditions, seasonal vegetable harvests improved, resulting in lower vegetable prices and a surge in exports of tomatoes, potatoes, and small vegetables. However, other crops and most animal production saw a decline.
Looking ahead, the European Bank for Reconstruction and Development (EBRD) projects 2.9% growth for Morocco in 2024. Meanwhile, the Council of Bank Al-Maghrib (BAM) forecasts a slight decline in growth to 2.8% by year-end, followed by a rebound to 4.4% in 2025.
As Morocco navigates these mixed economic signals, the country's ability to leverage its industrial strengths while addressing challenges in agriculture and services will be crucial for sustained growth in the coming years.