Growth: Conditional recovery | L’Economiste

After the sluggishness of the last quarters, growth could resume during the first three months of the year. The Moroccan High Commissioner’s Office for Planning (HCP) expects an increase of 3.4% in economic activity versus 0.3% in the same period in 2022, but uncertainty remains.

The situation will depend on the geopolitical context and especially the weather. If there is rainfall, the agricultural value added should recover. It would increase by 6.7% according to the forecasts of the national statistics agency.

The 2022/2023 agricultural season is certainly marked by a rainfall deficit of 69% in October and November 2022. A catch-up was made with the return of rainfall in December, which resulted in an improvement in reserves; thus bringing back the agricultural season to its seasonal evolution.

Excluding agriculture, growth should increase by 3% during this first quarter of 2023. As has been the case for several years, domestic demand remains the engine of expected growth. Its contribution should reach 3.2 points versus 0.8 points a year earlier. This is partly explained by the recovery in household purchasing power, particularly in rural areas. As a result, consumer spending will pick up again: 4.5% at the end of March versus 1.1% at the same period last year. On the other hand, on the corporate side, demand should slow down, impacted by the continued tightening of monetary policy. Last December, the central bank conducted a new monetary tightening by raising the key rate by 50 basis points to 2%. However, the High Commission for Planning remains optimistic since it anticipates continued growth in investment due to “support from public spending”. In the services sector, the non-market sectors and the trade and tourism branches will boost the added value of the tertiary sector. This value would increase by 4.6%.

As far as the secondary sector is concerned, it would suffer the impact of the combined decline in mining and construction activities as well as of the fall in foreign demand for export industries. In fact, global growth prospects depend on several factors: geopolitical developments, particularly in Ukraine, the health situation in China, the effectiveness and continuation of fiscal support, the impacts of monetary tightening on consumption and the investment, as well as the volatility of commodity markets. “The lack of dynamism in domestic demand in the main advanced economies and the decline in new export orders in the manufacturing sector would constrain world trade, which is expected to slow in the first quarter of 2023”, explains the HCP. Under these conditions, world demand to be met by Morocco would increase by 3% instead of 4.1% in the first quarter of 2022, and therefore the contribution of exports to national growth would slow down by 2.4 points whereas it stood at 6.9 points a quarter earlier.

Khadija MASMOUDI