Rabat- Morocco’s GDP growth will moderately slow in 2018 and 2019, however tourism revenues will continue to support the economy, forecasts the research group BMI in its latest economic outlook report.
BMI, a research firm that provides macroeconomic, industry and financial market analysis, is positive that the tourism sector will remain the tailwind for Morocco’s economic growth.
Although GDP growth will slow compared with the high rate it recorded in 2017, the firm is optimistic about GDP’s regional average, thanks to the key growth drivers, tourism and the manufacturing industries’ aeronautical and automotive benefiting from foreign investment.
GDP growth and tourism revenues
Tourism generated revenues totaling MAD 70 billion last year.
The number of overseas visitors entering the border reached 11.35 million, a 10 percent increase from 2016, representing an increase of more than 1 million tourists.
Tourist numbers increased from Morocco’s main EU markets, such as Germany (up 15 percent), the Netherlands and Italy (up 9 percent), France and Spain (up 8 percent), as well as the United States, which experienced a significant increase of 29 percent.
Furthermore, figures from other markets show very encouraging signs: 39 percent increase from Japan and a 38 percent increase from Brazil.
According to the World Travel & Tourism Council, the sector’s growth will have a positive impact on both domestic consumption and exports, resulting in major growth.
Morocco’s Tourism Observatory recently reported that a total of 4.1 million tourists visited the kingdom between January and May 2018. The number of annual foreign tourist arrivals increased by 15 percent from 2017.
Tourism is highly dependent on European demand, especially France and Spain as the two countries accounted for 49.0 percent of visitors in Morocco in the first four months of 2018.
As for Morocco’s GDP growth, it will remain above the regional average as it is expected to be at 3.5 percent in 2018 and 3.3 percent in 2019, falling short of the 4.1 percent it grew in 2017.
The research firm asserted “agricultural output expansion rates underpin the view for real GDP growth to slow in 2018.”
In 2017, agriculture accounted for 12.8 percent of real GDP, owing to its fruitful activity.
According to the survey, fluctuations in the country’s agricultural activity hinder its economic growth and the Moroccan economy will remain very vulnerable to shifts in agricultural output as the country’s farms are still reliant on rainfall.
Therefore, naturally, bountiful rains significantly boost yields and economic output.
Manufacturing sector to perform well in 2018-2019
The manufacturing sector will outperform past records in the coming quarters due to the booming activities of the automotive and aeronautic industry in addition to phosphates processing.
However, the sector’s momentum will slow in 2019 on the back of weaker demand from key export markets.
On the other hand, vehicle production is expected to grow by an annual average of 17.4 percent over the quarters of 2018 and 2019.
The report explains: “These investment flows are underpinned by the government’s extensive support and incentive programmes, and an increasingly favourable investment climate.”
Furthermore, 46.6 of Morocco’s exports go to Spain and France. Exports of goods and services will grow slowly from 2019 onwards, “softening headline growth.”