Morocco: Significant Drop in Economic Activity in Q2-2020 (HCP)

The national economy shrunk by 13.8% in the second quarter of 2020, instead of an increase of 0.1% a quarter earlier, according to the High Commission for Planning (HCP).

This decrease is attributable to a contraction of 14.4% in non-agricultural value added and a 6.1% decline in that of agriculture, said the HCP in its note for the 2nd quarter of 2020.

The tertiary sector, the main driver of economic growth, declined by 11.5% in Q2-2020, suffering from the drop in commercial activities, transport, accommodation and catering, said the same source, noting that only communication and non-market services remained dynamic, with the reinforcement of operating expenses.

In the secondary sector, the pace of development dropped to -14.3%, after +0.2% in the first quarter, the HCP said, adding that the downturn in activity would have been more noticeable in the sectors of building and civil engineering, electricity and industry, particularly textiles, metallurgical, mechanical and electromechanical industries and building materials. The food and chemical industries kept their growth rate trend.

 The mining activity, for its part, has shown great resistance to the effects of the crisis linked to the pandemic of the new coronavirus (Covid-19). In annual variation, its added value increased by 3.7% in Q2-2020, thanks in particular to the improvement of the extraction of non-metallic ores.

The production of raw phosphate, which had almost stagnated in the first quarter of 2020, would have been more sustained in April 2020, on the back of a stronger demand from local chemical industries, in line with the expansion of the exported quantities of fertilizers.

Despite growing uncertainties over global demand for fertilizers, international trade in phosphate fertilizers is reported to have maintained its increase.

In addition, disruptions in Asian global supply chains for chemical raw materials would have boosted domestic exports of raw phosphate by 7.4%.