Economic growth : Why Morocco can do better
Morocco hAgainst a turbulent global and national backdrop (Covid, inflation, drought, geopolitical tensions, war in Ukraine, Gaza, earthquake…), Morocco has so far shown a certain resilience. Foreign exchange reserves (32 billion euros), balanced public finances, the remittances of more than 115 billion Dirhams (11 billion Euros) from Moroccans Living Abroad in 2023, and tourism revenues of around 105,000 billion Dirhams (10.500 billion Euros ), with some 14.5 million arrivals… these are just some of Morocco’s assets.
These are all solid assets that would, under other circumstances, argue in favor of strong growth. However, as of today, forecasts by the HCP (High Commissioner’s Office for Planning), the Central Bank and the Ministry of the Economy and Finance all point to growth of around 3%. “ In a turbulent environment, the global economy is likely to continue to suffer the effects of ongoing geopolitical tensions, the fallout from tighter monetary policies and ongoing inflationary pressures. The recovery in global economic growth is thus likely to remain slow…», says the HCP. The forecasts for 2024 are based on the assumption of below-average cereal production during the 2023/2024 crop year, and on the new measures and provisions announced in the 2024 Finance Law. These forecasts are also underpinned by a set of assumptions relating to the evolution of exogenous factors governing the Moroccan economy, both nationally and internationally.
According to Maxime Darmet, Senior Economist France & USA for the Allianz Group, while Morocco expects growth of around 3% in 2024 and 2025, the real potential of the country’s economy is 5 or even 6%. To achieve this, the senior economist believes the country needs to engage a series of levers, notably the business climate, human capital, education/training, a highly skilled workforce, the attractiveness of FDIs, the repatriation of funds for investors, and greater flexibility in the control of the Foreign Exchange Office (Office des Changes) … In Maxime Darmet’s opinion, credit risk is medium in Morocco, in addition to a framework of stability and macro-economic equilibrium. Added to this is a prudent and credible economic policy and strong resilience despite inflation. At the same time, the country has significant financing needs. Hence the current high debt levels..
Amin RBOUB
