Morocco’s Economy Shrinks 7.1% in 2020 Amid COVID-19 Crisis

In 2020, the economic recession in Morocco would have exceeded 7%, reports L’Économiste, which points out that GDP would have experienced an even stronger drop if the state had not provided support to businesses and households in the face of the health crisis, the harmful effects of which could extend over several years. "Without public aid, poverty would have been 7 times higher and vulnerability multiplied by 2, deepening inequalities considerably," the daily said, adding that in the last quarter of 2020, the economic situation indicated "a contraction of activity of 6%, in particular due to the 7.3% drop in the value added of the agricultural sector and 5.5% of that of non-agricultural activities".

In the primary sector, value added fell in volume by 6.8% during the same period due to a 7.3% drop in agricultural activity and a 0.3% increase in fishing activity. In the secondary sector, value added fell by 1.6% due to a significant 8.9% growth in the extractive industry. In the tertiary sector, there was a 7.5% decline in value added during the same period, due in particular to a "sharp drop" in several branches of activity such as hotels and restaurants (-57.1%), transport (-18.6%), and trade (-8.2%), the daily reports.

In addition, moderate inflation of 1% on average was recorded. According to the daily, it was caused by a contraction in domestic demand, whose contribution to economic growth is around 6.1 points, to which is added a 4.3% drop in final consumption expenditure. As for the final consumption of public administrations and gross fixed capital formation, they regressed by 0.7% and 9.4% respectively. Gross investment, for its part, fell to 29.6% of GDP.