Morocco’s Economy Grows 3.3% in Q4 Despite Inflation and Phosphate Export Decline

In its latest report on Morocco’s economic situation in the last quarter of 2023, the HCP revealed a sharp drop in phosphate exports and their derivatives compared to the previous quarters (-4.3 points vs. -17.6 points and -11.8 points), despite the increase in the quantities of natural and chemical fertilizers exported. This drop is explained by the stagnation of their prices on international markets compared to the same period of the previous year.

Domestic demand, on the other hand, was expected to continue the upward trend observed in the third quarter of 2023, after a 0.1% average decline in the first two quarters of the year, driven by a 12.8% year-on-year increase in investment. Investment in manufacturing products should also record an increase due to the increase in foreign demand for automotive, electrical and electronic products, the note points out, stressing that investments in the fields of information technology and real estate will experience a slowdown.

The inflation rate growth should also record a decline, with the exception of the energy sector, whose decline is less significant compared to the previous quarter (-1.5% vs. -5.1%). Similarly, a slowdown in agricultural activities was expected in the fourth quarter of 2023 due to the drought and the deficit in precipitation, a situation that has negatively impacted the production and yield of vegetables and fruits, whose exports have plummeted drastically (-16.8% for small vegetables, -25.9% for tomatoes, -29% for strawberries and -61.5% for watermelons).

In total, the agricultural sector will experience a growth of 5.2% year-on-year, compared to +6.9% at the beginning of the year, as well as the poultry sector with an increase in the number of chickens and turkeys intended for slaughter of 10.3% and 10% year-on-year. In addition, the livestock sector is no less affected by the drought. However, red meat production will remain mainly supported by the increase in live animal imports, the note indicates, noting a 15.5% and 15.2% increase respectively in the volume of exports and imports of goods and services year-on-year in the fourth quarter of 2023, compared to +8.1% and +9.3% in the previous quarter.