Morocco’s Economic Growth to Slow in Q4 After Strong Q3 Rebound, HCP Forecasts

If GDP grew by 4.3% in the third quarter, it should only grow by "only" 3% in the fourth quarter of 2024 and 3.5% in the first quarter of 2025. This moderation of growth is notably explained by a slowdown in global demand and a return to normal for industrial activities, after an exceptional third quarter.

However, there is no need to be alarmed. The HCP is betting on a "notable recovery" from the beginning of 2025, provided, however, that the winter rains are there and that inflation remains under control. Non-agricultural activity should, for its part, remain dynamic, driven by domestic demand.

Households, supported by the social and fiscal measures put in place by the government, should continue to consume. The HCP thus forecasts a 3.2% increase in consumption expenditure in the fourth quarter of 2024, and 3.4% in the first quarter of 2025.

On the business side, the situation is more contrasted. While public enterprises maintain their investments, particularly in infrastructure related to sporting events and water desalination, private enterprises could, for their part, ease off. The reason: the slowdown in external demand and the rise in labor costs.

As for inflation, it should remain under control. The HCP forecasts a 0.7% rise in consumer prices in the fourth quarter of 2024, compared to 1.3% in the third quarter. This decline is notably explained by a base effect and by the decrease in energy prices worldwide.

Despite this generally favorable context, the HCP warns against certain risks. The slowdown in the growth of external demand and the increase in the indebtedness of the Treasury and companies could weigh on the economic recovery. The institution therefore calls for vigilance and the continuation of efforts to support growth and employment.

It should be noted that the unemployment rate has remained above 13% for the fifth consecutive quarter, despite a slight improvement in the employment rate in the third quarter of 2024. A major challenge for Morocco, which must imperatively create jobs to absorb the growth of its active population.