Economic Slowdown Grips Morocco as Key Sectors Underperform Amid Pandemic Pressures

The productive sectors of the economy are depressed, indicates an analysis of the macroeconomic situation reported by l’Économiste. According to a recent DEPF note, almost all sectors are showing quite clear underperformance. These are the industrial, tourism and construction sectors.

The same source specifies that this particularly degraded economic climate is due to the restrictions induced by the health crisis context on the normal functioning of commercial players. While the manufacturing industry is struggling to relaunch, it would have seen an improvement in production in the chemicals and petrochemicals sector.

Regarding the agri-food, mechanical and metallurgical sectors, they would have stagnated, while textiles and leather and electricity and electronics are showing a sharp decline. As for the volumes sold on the market, the decline is observed with almost all branches of activity except agribusiness which maintains the same level of performance. As for the extractive sectors such as Phosphates and derivatives, they present optimistic prospects, "particularly with the rebound in fertilizer prices".

The Ministry of Finance also notes that domestic demand has been supported by the expenses incurred by the Covid-19 Fund. In a recent note on the economic situation, the DEPF assures that the negative impact of the pandemic would have been partially offset by the measures taken by the public authorities. Faced with the caution felt in the market, only a small margin of maneuver is dedicated to investment, it is indicated.

According to the same source, official reserve assets have fallen due to the drop in tourism receipts and remittances from Moroccans living abroad. To date, they represent the equivalent of 6 months and 20 days of imports of goods and services. This margin of maneuver is provided by the precautionary line granted in April by the IMF to Morocco. With the appreciation of bank loans at the end of May, driven by cash facilities and equipment loans, only the financing of the economic circuit could be a salvation for the economic climate.