Growth in Morocco: AfDB Predicts 4% in the Event of a Return to Normal Activity in 2021

GDP growth is expected to return to 4% in Morocco in the event of a return to normal activity in 2021, the African Development Bank (AfDB) estimates.

“In the event of a return to normal activity in 2021, GDP growth is expected to return to 4%. The budget and current account deficits are expected to improve from 4.8% to 5.3% and 4.2% to 5.3% of GDP, respectively,” the AfDB analyses in a supplement to its annual African Economic Outlook 2020 report.

As elsewhere, the Covid-19 pandemic has altered Morocco’s economic outlook for 2020, the Bank says, pointing out that “the crisis affecting Morocco’s main trading partners (Spain, France, Italy and Germany) will impact on exports, particularly those of rock phosphate and its derivatives, which accounted for half of exports and a tenth of GDP in 2018-2019”.

It will thus impact the “imports of capital goods for Morocco’s international sectors, namely the automotive, aeronautics and electronics industries. The confinement measures have also affected tourism, hotels, restaurants and transport, while agricultural GDP was already hampered by below-average rainfall,” the Abidjan-based AfDB notes.

If the pandemic slows down in the first half of 2020, growth forecasts in Morocco should “be 7 percentage points lower than initially expected”.

However, if the pandemic continues until December, growth is expected to decline by 8.3 percentage points. The budget deficit is expected to increase by 3 to 3.4 per cent compared to the pre-pandemic forecast.

The current account deficit is expected to reach 3.9% as a result of lower spending on travel, remittances from Moroccans living abroad and foreign direct investment, but will be mitigated by lower oil prices.