The HCP note explained that the COVID-19 crisis has resulted in a decline in foreign demand from Morocco’s main trading partners.
Rabat – Morocco’s economic growth will mark a decline of 8.9 points in the second quarter of 2020 instead of the -3.8 point prediction relayed April 7, the High Commission for Planning (HCP) stated.
The new forecast is the result of the constantly-changing developments in the COVID-19 crisis.
In its recent assessment of the Moroccan economy, the HCP said the decline would represent a potential overall loss of approximately MAD 29.7 billion ($2.89 billion) in the first half of 2020 rather than the MAD 15 billion ($1.5 billion) loss the HCP predicted on April 7.
The note attributed the potential decline to a lull in economic activity.
“Our forecast of the growth of foreign demand addressed to Morocco has been revised downward, to reach -12.5% in the second quarter of 2020, instead of -6% forecast on April 7, following the expected decline in imports from the kingdom’s main trading partners,” the HCP said.
The note explained that the country’s economy is faced with a drop in foreign demand and that exports of goods and services from Morocco are expected to decline by 6.1%, while imports are expected to fall by 8.4%.
The extension of confinement in Morocco for another month resulted in economic stagnation and a downturn in both external and domestic demand.
“The growth in household consumption should decline by 1.2% in the second quarter of 2020, mainly due to the drop in spending on energy, durable goods, transport, catering and leisure,” the HCP explained.
Continuous decline in key sectors
The HCP forecasted an ongoing decline in terms of investments, representing a rate of -26.5% compared to the second quarter of 2019.
“The worsening of the crisis health COVID-19 would push companies to limit their financing needs as much as possible, in a context of uncertainty about the resumption of demand,” the HCP note stated.
The situation will result in a GDP decline of 6.8% in the second quarter of 2020.
The growth in the agricultural sector would stand at -4.2% in the second quarter of 2020, while that of non-agricultural activities will decline by 6.9% over the same period.
The HCP expects the tertiary sector to suffer from a reduction in trade and transport.
The HCP, however, reassured that the forecasts remain subject to significant revisions of data and to the evolution of the world economic situation.