Domestic demand is expected to reaffirm its recovery during the first quarter of 2024, contributing 6.7 points to the overall economic growth, compared to a drop of 0.1 points during the same quarter of the previous year, according to a new report issued on Monday by the High Commission for Planning (HCP).
The Commission explained, in a summary of the economic situation for the first quarter of 2024 and the expectations for the second quarter of 2024, that household consumption is likely to surge by 2.7%, up from 0.1% annually.
This rise is partly attributed to the impact of the calendar effect associated with increased consumption spending during Ramadan and before, as well as to the improvement in purchasing power resulting from easing inflationary pressures.
Household consumption expenditures, according to the same source, will primarily focus on imported food products and consumer final goods. Wholesale traders’ opinions on the development of their sales of food and beverages, collected during recent research on the economic situation, showed a 24.6-point improvement on an annual basis, while their views on sales of other local and agricultural goods constituted to decline.
Public administration consumption, on the other hand, is expected to rise by 3.4%, up from 2.7% in the same quarter of the previous year, benefiting from increased management expenditures.
The net contribution of external demand to overall economic growth is expected to remain negative, reaching -3.9 points during the first quarter of 2024, following an increase in the volume of national imports of goods and services by 17.3%, alongside an 8.4% increase in the volume of exports on an annual basis.
Investment expenditures are expected to maintain their strong momentum for the third consecutive quarter, with a 17.3% surge in gross capital formation in the first quarter of 2024.
Companies are anticipated to benefit from improved profit margins over the past year supported by the inflationary wave. They are also expected to increase their reliance on bank borrowing to finance their investment projects.
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