Morocco Slashes Economic Growth Forecast Amid COVID-19 Crisis

The High Commission for Planning (HCP) announces a 8.9 point cut in national economic growth compared to its evolution before the covid-19 crisis. This would represent a total loss of around 29.7 billion DH for the first half of 2020, instead of 15 billion DH forecast on April 7. Significant revisions, the publication of new data, the evolution of the global situation and the impact of support plans on the national economy are all factors that will affect these forecasts. This update of the forecasts was carried out as part of the HCP’s monitoring and analysis of the economic situation.

A more pronounced slowdown in economic activity is expected in the first quarter of 2020. This is reflected in economic growth that would have fallen to +0.7%, instead of +1.1% set on April 7, based on information collected up to March 31. It is the accentuation of the decline in agricultural value added to -4.4% that would be at the origin of the downward revision. Added to this are the activities of the secondary sector, which would have contracted the most, with a slowdown in the growth rate of manufacturing industries and electricity. For the first quarter of 2020, the growth of the tertiary sector remained moderate, standing at 2.6%. All other sectors of activity are suffering the effects of covid-19. The support provided by domestic demand to economic growth has weakened in the first quarter of 2020.

In a press release, the HCP announced that the second quarter of 2020 will be affected by a more pronounced decline in economic growth. Indeed, the growth prospects for the global economy have been revised downward due to the spread of covid-19 and the extension of confinement periods in several countries. Faced with this situation, the foreign demand addressed to Morocco has been revised downward. It will be -12.5% in the second quarter of 2020, instead of -6% forecast on April 7. This will lead to a decline in the volume of exports of goods and services by 6.1%. The overall GDP should decline by 6.8% in the second quarter of 2020 due to the uncertainty of the recovery in demand.