Entering the third quarter of 2020, HCP has released its prediction of a 4.6% decline for economic activity in Morocco.
Rabat – The Moroccan High Commission for Planning (HCP) has issued its analysis of economic activity for the second quarter of 2020, revealing a decline of 13.8%.
HCP explains that the losses are a repercussion of a 14.4% decrease in non-agricultural added value and a 6.1% decrease in the added value of agriculture.
In addition, the 11.5% decline in tourism — caused by the regression of commercial activities, transport, accommodation, and catering — has also played a role in the overall contraction.
For the industrial sectors of construction, public works, electricity, textile, and metallics, HCP revealed a deficit of 14.3% during the second quarter of 2020.
Morocco’s mining sector, meanwhile, remained strong amid the COVID-19 crisis. HCP recorded an increase of 3.7% in activity during the same period and attributes the stability of the mining sector to the improvement of the extraction of non-metallic ores.
With disruptions in global material supply chains of the chemical industry, Morocco remains the world’s largest exporter of phosphates and increased national exports by 7.4%.
Prospects for Q3
As 2020 enters its third quarter, HCP has released its predictions for Morocco’s economic activity, expecting a decline of 4.6% compared to the 2.4% increase recorded in 2019.
HCP explained that the contraction in economic activity would be the repercussion of a 4.1% decrease in non-agricultural added value and a 5.9% decrease in the added value of agriculture.
With the nationwide ease of lockdown measures and the progressive reopening of tourist activities, HCP expects a slight recovery of economic growth and international trade.
Morocco may see a growth of 3% compared to the second quarter of 2020 but an annual decline of 15.6% in national economic activity.
HCP expects household consumption to decrease by 4.6% in the third quarter and 6% annually due to the dynamics of social spending.
The industrial sector is expected to decline by 5.8% in the industrial added value of local markets. For export-oriented industries, HCP predicts a weak recovery in foreign demand, namely in the metallurgical, mechanical, and electromechanical industries.
Meanwhile, the electrical energy sector should recover gradually alongside industrial activities and rail transportation, according to HCP.
However, HCP is confident that the decrease in the added value of agricultural activities should not cause an increase in food inflation. Agricultural supply remains in excess despite recorded declines compared to the same period in 2019.