GDP growth is expected to return to 4% in Morocco on the assumption that activity will return to normal in 2021, estimates the African Development Bank (AfDB).
“Assuming that activity returns to normal in 2021, GDP growth is expected to return to 4%. Budget and current account deficits are expected to improve to 4.8% to 5.3% and 4.2% to 5.3% of GDP, respectively,” analyzes the AfDB in a supplement to its report annual report “African Economic Outlook 2020”.
Like everywhere else, the Covid-19 pandemic changed Morocco’s economic outlook in 2020, says the Bank, stressing that “the crisis affecting Morocco’s main trading partners (Spain, France, Italy and Germany) will impact exports, especially to those of natural phosphate and its derivatives which represented half of exports and one tenth of GDP in 2018–2019”.
It will thus impact the “imports of capital goods for the international sectors of Morocco, namely the automotive, aeronautical and electronic industries. Containment measures have also affected tourism, hotels, restaurants and transportation, while agricultural GDP was already hampered by below average rainfall,” said the AfDB based in Abidjan.
If the pandemic slows in the first half of 2020, growth forecasts in Morocco should “be 7 percentage points below what was originally planned”.
However, if the pandemic continues until December, growth is expected to decline by 8.3 percentage points. The budget deficit is expected to increase from 3% to 3.4% compared to what was forecast before the pandemic.
The current account deficit is expected to reach 3.9% due to lower travel spending, remittances from Moroccans living abroad and foreign direct investment, but will be offset by lower oil prices.