Follow us on Facebook

Walaw

Economy

Morocco’s Economic Growth to Slow by 2.4% in First Quarter of 2024

Friday 05 January 2024 - 08:06

Zoom

Morocco's economic growth is expected to decelerate in the upcoming months due to prolonged drought conditions severely impacting the farming industry, states a recent report by the High Commission for Planning.

According to the report released on Thursday, Morocco's GDP growth is anticipated to slow to 2.4% year-over-year in the first quarter of 2024, marking a notable decrease from the 3.5% recorded during the same period last year.

The report ominously warns that the recovery, which commenced in late 2023, will be impeded by the resurgence of the autumn drought.

The onset of the 2023-24 growing season has witnessed significant delays in establishing early crops due to scanty rainfall, with precipitation over the initial four months registering 53% below normal levels.

The report suggests that if rainfall returns to typical seasonal norms, the agricultural sector could achieve a modest 0.5% growth in the next quarter. However, the outcome remains uncertain at this juncture.

Excluding the agricultural sector, overall GDP growth is projected to reach 2.9% next quarter, propelled by the sustained expansion in secondary industries such as chemicals, machinery, and automotive manufacturing. Additionally, the mining sector is anticipated to continue its recovery from previous steep declines.

Steady activity in the services sector will contribute to growth, although there may be a gradual slowdown attributed to reduced household incomes. Domestic consumption remains the primary driving force, slightly tempered by lower rural wages.

On the flip side, business investment is poised for a decline as rising interest rates tighten funding. Furthermore, Morocco's external trade sector is expected to subtract 1.8 percentage points from total GDP due to a slowdown in export gains.

While certain sectors exhibit strength, Morocco's economic outlook is likely to be partially obscured by challenging farming conditions in the coming months.