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HCP expects growth of 2.7% in 2019 and 3.4% in 2020

In Morocco, the HCP expects economic growth of 2.7% in 2019 and 3.4% in 2020. Climate hazards, slow recovery of non-agricultural activities, domestic demand satisfied by imports … all variables that would have impacted national economic activity. The year 2020 may well be the year of the resumption of economic growth, according to the prospects of the High Commission for planning.

Presenting Tuesday in Casablanca the state of the national economy in 2019 and its prospects in 2020, the High Commissioner for Planning (HCP), Ahmed Lahlimi Alami said that the gross domestic product (GDP) in Morocco should record a growth of 2.7% in 2019 and 3.4% in 2020.

Speaking at a press conference, Lahlimi Alami said the outlook is based on an average scenario of cereal crop production, supported by the consolidation of other crops and livestock activity during the 1990s. 2019/2020 campaign and also assume the renewal of the fiscal policy implemented in 2019 and taking into account the implementation of the second tranche of the valuation of wages. These prospects also take into account the changing international environment marked by the maintenance, in 2020, of oil prices at their current level of the year and by a slight improvement in global demand addressed to Morocco.

According to Mr. Lahlimi, the primary sector should see a slight increase in its value added of 4.6% instead of a 2.1% decrease that would be recorded in 2019, while the non-agricultural sector, secondary activities and services, for its part, would generate growth of 3.1%, almost the same pace as in 2019.

Regarding the secondary sector, it should globally record a growth of 3.1%, he said, adding that the tertiary sector should achieve growth of about 3%, the same pace expected in 2019. In nominal terms, continued Lahlimi, the GDP would grow by 4.5% instead of 3.5% in 2019, noting that this trend points to a slight rise in inflation as measured by the GDP implicit from 0.8% in 2019 to 1% in 2020. “In these circumstances and taking into account the evolution of the active population and the virtual stagnation of net job creation, the unemployment rate should increase 10% in 2019 after having been 9.8% in 2018 before falling to 9.9% in 2020”, he noted.

Meanwhile, Lahlimi stressed that domestic demand should strengthen its growth rate to 3.2 percent, recording a 3.5 percentage point contribution to economic growth in 2020, instead of growth of 2.8 percent in 2019 and a contribution of about 3.1 points estimated for the current year, adding that external demand should generate, for the third year in a row, a negative contribution of -0.1 point.

As for the budget deficit, it should, taking into account investment expenditure, go from 3.6% in 2019 to 3.5% of GDP in 2020, said Mr Lahlimi, adding that in the face of this deficit situation, the debt ratio of the Treasury should be reduced to reach 64.8% of GDP instead of 65.3% in 2019. “Therefore, the overall public debt would fall slightly to 80.7% of GDP. GDP instead of 81.3% of GDP estimated for 2019,” he explained.

On bank credit, Lahlimi said that taking into account the prospects for economic growth in 2020 and the moderate rise in prices, they should increase by 4.6% in 2020 instead of by 3.8% in 2019, stating that, assuming that net international reserves would recover about 5.3 months of imports of goods and services, the money supply should increase by almost 4%, 6% instead of 4.3% in 2019.

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