Morocco’s HCP forecasts a good future for agriculture due to rainfalls, but investment efforts will experience challenges.
Rabat – Morocco’s High Commission for Planning (HCP) has said it expects the Moroccan economy to grow by 0.5% during the first quarter of 2021.
The HCP said Morocco’s economic activity will record an increase of 0.5% in the first quarter of 2021, taking into account a 0.5% drop in value added excluding agriculture and a 10.8% rebound in that of agriculture.
Morocco’s overall economic growth will accelerate significantly over the following quarters, benefiting from a “base adjustment effect linked to the fall in activity during the confinement period,” the institution noted.
Non-agricultural activities should continue to recover in the first quarter this year, posting a decline of 0.5%.
Meanwhile, industrial activity should recover significantly, while the construction industry will continue to suffer from weak demand for residential real estate.
The HCP notice forecasts a recovery in the electricity production in the wake of the gradual resumption of industrial activities.
In the tertiary sector, the HCP predicts lukewarm activity and a moderate recovery in trade, transport, and catering.
For agricultural activities, the HCP announced that the sector would experience a significant recovery under the “assumption of excess and generalized winter fall.3
The document said that agricultural value added should register an increase of 10.8%, contributing to the overall economic growth by over 1.2 point.
The HCP acknowledged that the 2020-2021 agricultural season experienced a difficult stardue to a rainfall deficit of 48% in October and November 2020.
“The almost general return of rainfall in December should favor the acceleration of soil work.”
Itnoted, however, that the continuation of favorable climatic conditions during the winter and spring seasons would allow a more sustained increase in agricultural production, which would be accompanied by an improvement in employment after two successive years of drought.
Domestic demand is likely to continue to recover at a moderate pace. The decline in household spending should ease under the effect of the forecasted recovery in purchases of food and manufactured goods, HCP explained.
HCP also forecasts that restaurant and transport spending should increase compared to the fourth quarter of 2020, but at a slower pace.
Expenses on non-market services, however, will remain “dynamic situating the increase in public consumption at 4.3%.”
Meanwhile, investment efforts are set to remain relatively weak, including in construction products.