HCP sees silver lining in Morocco's 2023 economy expects growth, drop in prices

The High Commission for Planning expects Morocco’s economic growth in 2023 to reach 3.3 percent, driven mostly by domestic demand.

In a report on the forecast economic budget for the year 2023 published on Thursday, the Commission said it was concerned about the risks of “uncertainty” associated with the development of three critical determinants: the war in Ukraine, the evolution of interest rates, and epidemiological and climatic risks.

Inflation rate will reach 1.9 by the end of 2023, compared to 5 percent at the end of 2022.

Trade balance deficit is also expected to decline during the current year, reaching minus 20 percent of the gross domestic product, compared to minus 22.7 percent during the previous year.

On the other hand, the rate of total public debt will rise slightly to exceed 83 percent of the GDP, compared to 82.5 percent recorded in 2022. The budget deficit will also deepen, according to data provided by the delegation’s forecast budget, to minus 5.2 percent of GDP compared to 2022.

HCP predicted that “household consumption will accelerate slightly,” thanks to two significant factors: The expected increase in the revenues of the agricultural sector and the sustainable level of remittances from Moroccans of the world.

On the other hand, total investment is expected to remain “moderate,” as its share in the gross domestic product will not exceed 31.5 percent.

The delegate expected that “the new changes in corporate tax collection, the expansion of the tax base, and the continuation of the monetary tightening policy will push companies to reduce storage and investment operations in the year 2023,” noting that “net external demand is expected to continue its negative contribution to economic growth.”

“The shocks to which the Moroccan economy is exposed, despite its relative resilience, cause more permanent damage to economic resources and productive and human capital,” recalling that during the decade of 2010, and as a result of the shock of the international financial crisis, Morocco lost 75,000 jobs.

The High Commission for Planning recommended “strengthening productive investments.”

The HCP said that “private enterprises and families will play a decisive role in reviving capital, as they contribute 66 percent to growth, in contrast to territorial groups in which the Incremental capital-output ratio (ICOR) records very low profitability.”

The official statistical institution considered that “public investment should ultimately be a factor of growth by encouraging more effective private investment.”

The National Economic Prospects for the year 2023 relied on “the hypothesis of an average agricultural production during the 2022-2023 season, as well as measures and requirements announced in the financial law for the year 2023.”

These expectations were also based on a set of assumptions related to the development of external factors surrounding the national economy, whether nationally or globally.