Economic Growth Moderates in First Quarter of 2024, but Remains Resilient

In its comprehensive assessment of the nation's economic performance during the first quarter of 2024, the High Commission for Planning (HCP) revealed a moderation in the growth rate of the national economy, which stood at 2.5% compared to 3.9% during the same period the previous year. Despite this slight deceleration, the growth was underpinned by robust domestic demand, contained inflation, and an improvement in the country's financing capacity, according to the HCP's report on the national economic situation.

Non-agricultural activities exhibited a 3.2% increase, while the agricultural sector experienced a 5% decline, as noted by the HCP. Delving into sector-specific details, the report highlights significant trends and shifts across various economic spheres.

The primary sector's value-added, adjusted for seasonal variations, contracted by 4.3% in the first quarter of 2024, following a 1.7% increase in the same period the previous year. This decline was driven by a substantial 5% drop in agricultural value-added, compared to a 2.1% rise in the previous year, partially offset by a 10% increase in the fishing industry, which had previously experienced a 4.8% decline.

On the other hand, the secondary sector's value-added witnessed a remarkable 3.6% increase, in contrast to a 0.4% decrease during the same period last year. This positive performance was fueled by a slowdown in manufacturing activities to 2.1%, compared to a 3% rise previously, and a surge in the extractive industry's value-added by 17.7%, reversing a 12.1% decline in the previous year. Additionally, the electricity, gas, water, sanitation, and waste sectors saw a 3% increase, recovering from a 3% decline, while the construction and public works sector grew by 2.5%, compared to a 3% contraction in the previous year.

The tertiary sector's value-added experienced a deceleration in its growth rate, slowing from 6% in the same period the previous year to 3% in the first quarter of 2024. This moderation was marked by a slowdown in financial services and insurance activities to 3.9% from 7.3%, research and development, and business services to 3.6% from 4.3%, transportation and storage to 3.4% from 8.7%, education, health, and social services to 2.9% from 4.2%, real estate services to 2.1% from 2.7%, accommodation and food services to 1.9% from 5.8%, and information and communication to 1.3% from 3.1%.

However, the report also highlighted positive developments, such as an increase in public administration, social security services by 3.4% (compared to 3.1% previously), and trade and vehicle repair activities by 2.7% (compared to 1.4% previously).

Overall, the value-added of non-agricultural activities experienced a moderation in its growth rate, slowing from 3.9% in the same quarter of the previous year to 3.2%.

Considering these factors and accounting for a 5.5% increase in the volume of net taxes on products, the Gross Domestic Product (GDP) in volume terms registered a 2.5% growth in the first quarter of 2024, compared to 3.9% a year earlier.

At current prices, the GDP experienced a 3.8% increase, reflecting a 1.3% rise in the general price level.

As the nation navigates through economic fluctuations, the HCP's comprehensive analysis provides valuable insights into the resilience and adaptability of the Moroccan economy, guiding policymakers and stakeholders in their strategic decision-making processes.