Morocco: WB Expects 4% Growth Rate in 2021 - Report

Morocco’s economy is expected to grow by 4% for the year 2021, said Thursday Javier Diaz Cassou, World Bank (WB) Senior economist in Morocco.

This forecast is mainly due to the increase in agricultural value-added and the launch of the vaccination plan against the novel coronavirus pandemic (covid-19), he said at a round-table discussion dedicated to the presentation of the “Morocco Economic Monitor – From relief to recovery” report.

After two years of sharp decline due mainly to drought and poor rainfall, a recovery of agricultural value-added is expected for Morocco, he continued, adding that these forecasts also take into account the announcements made by the Moroccan authorities regarding the vaccination plan.

Prior to these announcements, the expected growth rate was 3.3%, the economist said.

Over the medium term, growth is expected to pick up gradually, but the pace and length of that recovery are subject to high uncertainty, according to the report.

The post-pandemic economic recovery is projected to be protracted, with real GDP only returning to the pre-pandemic trend, at the earliest, by 2022, it added.

According to WB, tourism is projected to recover at a slower rate as concerns about subsequent waves of COVID-19, as well as reduced household incomes and savings.

“We expect the pandemic to widen the fiscal deficit and drive up public debt in both 2020 and 2021. On the revenue side, tax revenues will be lower than previously expected in 2020 and 2021. On the expenditures side, significant increases are projected in 2020, driven by additional spending on health and social protection,” the report explained.

For the year 2021, a number of risks need to be closely monitored, namely, the room for maneuver of the economic policy to deal with a possible worsening of the health or international crisis, the external financing conditions that could deteriorate, the high financing needs, the evolution of outstanding maturities in a context of increasing payment delays.

The significant accumulation of contingent liabilities related to the guarantee programs put in place by the government, and the need to push economic growth above pre-pandemic levels are also challenges to be monitored, the WB report highlighted.

The Morocco Economic Monitor is a semi-annual report from the World Bank’s economic team on recent economic developments and economic policies.

Its coverage ranges from the macro-economy to the business environment and private sector development.