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Morocco: Sharp drop in GDP to 7.1% in 2020

The Covid-19 health crisis has had a severe impact on the Moroccan economy, leading to an unprecedented recession. In 2020, GDP contracted to 7.1%.

In 2020, the economic recession in Morocco would have exceeded 7%, the GDP would have experienced a steeper fall if the State had not provided support to businesses and households in the face of the health crisis, the perverse effects of which could be extend over several years. Without public aid, poverty would have been 7 times higher and vulnerability multiplied by 2, deepening inequalities, in the last quarter of 2020, the economic situation indicated a contraction of activity of 6%, under the effect in particular the 7.3% drop in value added in the agricultural sector and 5.5% in that of non-agricultural activities.

In the primary sector, value added fell in volume by 6.8% over the same period due to the 7.3% drop in activity in agriculture and the increase in fishing activity of 0.3%. In the secondary sector, value added fell by 1.6% due to the notable 8.9% growth in the extractive industry. In the tertiary sector, we note a drop in value added of 7.5% over 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%), trade (−8.2%).

In addition, moderate inflation at 1% on average was recorded. It was caused by a contraction in domestic demand, which contributes around 6.1 percentage points to economic growth, to which is added a 4.3% drop in final consumption expenditure. As for the final consumption of general government and gross fixed capital formation, they fell by 0.7% and 9.4% respectively. Gross investment fell to 29.6% of GDP.

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