Morocco’s Economy Shrinks 1.1% in Q1 as Coronavirus Impact Hits

According to the High Commission for Planning (HCP), Morocco’s economic growth would have declined to +1.1% and would stand at -1.8% respectively, in the first and second quarters of 2020, instead of +1.9% and +2.1% in the absence of the effects of covid-19.

The growth in foreign demand addressed to Morocco would have slowed down by 3.5% in the first quarter of 2020, on an annual basis, instead of 1.3% expected in the absence of the effects of the health crisis, suffering from the decline in world trade and the slowdown in the activity of the main trading partners, indicates HCP in its quarterly economic note.

As a result, HCP states that exports in value would have fallen by 22.8%, noting that the automotive industry, the leading export sector (27% of total exports), would have regressed the most.

However, there is a positive note: some agricultural and fishery products would have rather benefited from increased foreign demand, particularly for vegetables, fresh fruits and citrus fruits, due to the slowdown in Spanish, French and Italian production due to the lack of labor on farms.

As for imports, they would have declined by 4.8% in the first quarter of 2020, in particular due to the decline in the energy bill, which represents between 13 and 18% of the total value imported, the note continues.

Similarly, the trade balance deficit would have widened significantly (+23.8%) in the first quarter of 2020, due to the more significant drop in exports compared to imports. A situation that would be explained by a 11.6 point drop in the coverage rate to reach 49.7%.