Morocco’s Economy Faces Recession as GDP Expected to Shrink 1.8%

According to l’Économiste, the Moroccan economy should technically enter into recession, with two consecutive quarters of negative growth. Due to the uncertainties related to the health crisis (duration and effect of containment on activity), the High Commission for Planning (HCP) does not provide forecasts for the whole year, notes the same media.

Even before the crisis, the HCP had predicted growth close to 2% for the year. These forecasts, unfortunately, are no longer valid today, in the face of the estimated impact of containment and the shutdown of several activities.

According to the newspaper, GDP growth would be reduced by 3.8 points in the second quarter of 2020 compared to the initial scenario, the equivalent of a loss of around 10.9 billion dirhams against 4.1 billion in the 1st quarter. "Services should contribute the most (-2.49 points), followed by manufacturing industries (-0.39 point)," the same source specifies. It maintains that in the global context, Morocco will be impacted by the decline in foreign demand.

For L’Économiste, the 1.8% contraction of GDP in the second quarter is mainly due to a near halving of the growth rate of the value added of the tertiary sector, due to the shutdown of catering and accommodation activities. It is also influenced by a 60% decline in activity in transport, as well as a 22% reduction in trade.

"The manufacturing industries are the most affected by the decline in foreign demand addressed to Morocco," notes the same source. Agriculture, on the other hand, is not spared, with an estimated decline of 2.9% due in particular to the improvement in the growth prospects of spring crops, due to the return of rainfall at the end of March and the stabilization of animal feed prices.