Toronto - BMI Research, a Fitch Group Company, is predicting “real” GDP growth for Morocco in 2017, due to a substantial harvest rebound in the agricultural sector.
Toronto – BMI Research, a Fitch Group Company, is predicting “real” GDP growth for Morocco in 2017, due to a substantial harvest rebound in the agricultural sector.
BMI’s forecast calls for an increase in GDP growth from 0.9 percent in 2016 to 4.3 percent in 2017. They are attributing this growth primarily to favorable weather forecasts for the year.
Agricultural Recovery Behind Growth
2016 saw a contraction in the agricultural sector of 10.9 percent due to a severe drought, which resulted in a loss in grain production of more than 70 percent. BMI’s agribusiness team is predicting that grain production in 2017 will increase by 136 percent, making it a key factor in Morocco’s predicted GDP growth.
“Over the past decade, agriculture accounted for on average 13% of GDP and more than 40% of employment. As such, the sharp recovery in agricultural output will support private consumption growth in the country as well as exports.”
Strategic Development of Manufacturing Sector on Track
Continued reforms to the business environment and Morocco’s political stability continue to bode well for its strategy to become an export and manufacturing hub between Europe and Africa. According to BMI, the “relative political stability by regional standards will also support policy continuity and investment-friendly reforms over the coming years.”
BMI is also predicting a continued and gradual move toward higher-skilled manufacturing in the Kingdom, supported by investment promotion efforts on the part of the government. It identifies the auto and other transportation sectors, including aeronautics, as outperformers in 2016. “Foreign investment in the auto sector underpins this positive trajectory, with French manufacturer Renault increasingly using Morocco as a manufacturing base.”
Tourism Sector Recovering
After suffering from the effects of “regional security turmoil” in the MENA region throughout 2014-2015, the tourism sector in Morocco is rebounding. This is due to the fast growth in Chinese and Russian tourists visiting the Kingdom as well as Morocco’s relative stability compared to other parts of the region, such as Tunisia. BMI warns, however, that tourists remain apprehensive regarding security concerns in the region.
BMI’s forecasts support statements made earlier this week when the Minister of Agriculture, Fisheries, Development, Water and Forests, Aziz Akhannouch, announced record expectations for Morocco’s cereal output. He also reported a noticeable increase in quality and production in the animal industry during opening ceremonies for the 9th Agricultural Conference, Monday in Meknes.
“This year’s cereal output is expected to hit record levels between the three main cereals: 5.4 million tons for common wheat, 3 million tons for barley and 2.5 million tons for durum wheat.” Akhannouch said.
At the same time, Akhannouch also provided an update on Morocco’s Green Plan, which has created more than 300,000 farms. The animal industry has also recorded significant growth in quality and productivity.
Concluding its report, BMI is confident of the Kingdom’s ability to maintain its present positive course saying, “[…] we remain optimistic on the kingdom’s ability to become a manufacturing and exporting hub between Europe and Africa.”