A recent report by the International Studies and Consultation Firm PwC said that the Moroccan economy faces many challenges in 2023, that could affect the Finance Bill’s projections for this year, noting that there are opportunities that could constitute a strong impetus to economic growth.
Entitled “The Moroccan Economy between Challenges and Opportunities,” the consultancy firm said that the national economy was able to achieve rapid recovery after the COVID-19 pandemic, as growth in 2021 recorded about 7.9%, compared to an average North Africa and Middle East record of 3.7%. and the global economy by 6%.
The report indicated that “this recovery allowed the Moroccan economy to restore pre-crisis levels, but 2022 was marked by a series of external shocks represented mainly by the repercussions of the war in Ukraine, and internal ones through the dry season, which caused a change in the Morocco’s dynamism.”
According to the report, Morocco is facing imported inflation due to high energy prices and upward pressure on the prices of imported agricultural products.
Agricultural crops were also affected by the severe drought recorded in 2022, which continued during the current year.
Faced with this situation, the government was forced to restrict the exports of some foodstuffs such as tomatoes, onions and potatoes, as they are now prohibited from exporting to the West African market in order to limit the sharp rise in prices in the local market.
The report stated that “the 2023 Finance Law expects a deficit of 4.5%, but this goal will be difficult to achieve if a sustainable level of public investment is maintained at 6% of GDP.”
In view of the high prices of oil and grain imports, the current account deficit had deteriorated in 2022, as phosphate exports were unable to compensate for it, representing 23% of exports.
On the other hand, tourism is witnessing a return to pre-pandemic levels, as it is expected to provide comfortable revenues in 2023, in addition to the remittances of the Moroccan community abroad, which reached a record level last year, which will contribute to limiting the deterioration of the current account balance in 2023.
Morocco seeks to achieve growth of 4% this year, and an inflation rate of 4.5%, but this ambition is facing deteriorating international activity, as the European Union, the Kingdom’s main trading partner, will continue to face an unfavorable economic situation, after the growth achieved in 2022 of 3.5% and 5.2% in 2021, growth in the euro area is expected to be 0.9% this year.
The report considered that globalization, which led to more outsourcing from low-cost countries, showed its limitations after the pandemic, as the excessive dependence of European countries on China and Russia was costly after the emergence of shortage problems and disruptions in supply chains.
The strategies of European companies are currently based on a main axis represented in reducing dependence on geographically, politically and socially distant countries, and the goal is to reduce transportation costs, shortage risks and non-cost risks such as image and reputation. In this context, the Moroccan economy enjoys competitive and strategic advantages, making it a preferred destination for European companies looking for lower costs and geographical proximity that guarantees speedy supply and lower costs.
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