Morocco’s Economy Shrinks 13.8% in Q2 2020 Amid COVID-19 Crisis

The mining sector would have been less affected by the COVID-19 crisis. Its added value would have increased by 3.7% in the second quarter of 2020 due to the improvement in the extraction of non-metallic ores. Crude phosphate, whose production was at a standstill in the first quarter of 2020, would have seen a significant development in April 2020, due to demand from the local chemical industries.

In the agricultural sector, there has been an improvement in climatic conditions, with heavy rainfall of 86% recorded at the end of April and May 2020. On the livestock side, the deferment of farmers’ loan maturities has led to a reduction in cash flow losses. The poultry and dairy sectors would have remained the most stable in agricultural production. Overall, the decline in agricultural added value would have reached -6.1% in the second quarter of 2020, compared to -5% in the first quarter.

The money supply grew by 5.7% in the second quarter of 2020, after +5.1% in the previous quarter, on a year-on-year basis. As for official reserve assets, they increased by 22.1%.

In the second quarter of 2020, the COVID-19 health crisis severely affected several listed sectors. In total, the MASI and MADEX stock market indices fell by 9.9% and 10.1% respectively, on a year-on-year basis, and by 11.1% and 11% respectively compared to the previous quarter.

With the gradual lifting of lockdown and the resumption of transport and trade activities, good prospects are opening up for growth and trade in the third quarter of 2020. Moreover, Morocco’s external demand would improve by 3% compared to the second quarter of 2020, but its decline, on an annual variation of -15.6%.

The decline in household consumption, on the other hand, could be set at -4.6%, while public consumption would maintain its upward trend at 6%, on an annual variation, mainly due to social spending. All in all, the recovery of investment would be slow to materialize in the third quarter of 2020.