COVID-19: Morocco Predicts Slowdown in Economic Growth in 2020

Rabat – Morocco’s central bank, Bank Al-Maghrib, expects a slowdown in economic growth in 2020 due to the novel coronavirus (COVID-19) pandemic.

The board of the central bank held its first quarterly meeting of the year Tuesday, March 17, and analyzed recent economic developments as well as macroeconomic forecasts for the next eight quarters.

Bank Al-Maghrib estimates Morocco’s economic growth will stagnate at 2.3% in 2020 but bounce back to 3.8% in 2021.

Bank Al-Maghrib cites unfavorable climate conditions and the global spread of COVID-19 as the reasons for the economic stagnation.

The central bank expects Morocco’s agricultural value-added to decline by 2.7% in 2020, with a cereal harvest estimated at 40 million quintals, and for the pace of non-agricultural activities to slow to 2.9%.

In 2021, however, Bank Al-Maghrib predicts Morocco’s economic growth will rebound to 3.8%. The bank expects an increase in agricultural value-added of 8.1%, assuming an average cereal production of 75 million quintals, and an improvement in non-agricultural growth to 3.3%.

However, these forecasts “remain surrounded by significant uncertainties and are subject to downward revision if the global spread of the Covid-19 disease is not contained in the short term,” Bank Al-Maghrib stressed.

Bank Al-Maghrib also decided to reduce the key policy rate by 25 basis points to 2% in order to support economic activity in the face of unfavorable conditions and inflation evolution over the medium term.

“The rapid evolution of COVID-19 requires a frequent update of the situation assessment and of the economic forecasts,” the bank underlined.