Ministry of Finance: Moroccan Economy Gradually Returns to Normal

Rabat – Morocco’s economic activities are in a gradual return to normal, announced Morocco’s Department of Studies and Financial Forecasts (DEPF) at the Ministry of Economy and Finance.

By late 2021, Morocco’s economic activities in the agriculture, secondary, and service sectors had marked positive growths, leading to a gradual return to pre-COVID-19 levels.

Morocco’s main economic activity, agriculture, generated a 17.7% increase in added value in the third quarter of 2021, thanks to the good 2020-2021 agricultural campaign.

In case of low rainfall this year, the DEPF reported that affected farmers and breeders will benefit from a support program.

Similar to agriculture, secondary sectors recorded a 6.9% growth in added value in Q3 of 2021. Sectors of construction, manufacturing, and electrical energy caught up to pre-COVID-19 levels when the extractives sector witnessed positive growth.

As for the service sector, all branches performed well with the exception of the air transport and tourism sectors. The government allocated special funds to support the two sectors impacted heavily by the ongoing COVID-19 pandemic and subsequent border closures.

In addition to the economic upturn, Moroccan consumption rose at the end of 2021 due to the creation of 197,000 new jobs, the expansion of consumer credit, the good results of the 2020-2021 agricultural campaign, and the 36.8% increase in transfers from Moroccans residing abroad.

While Moroccan consumption grew, the department noted an increase in the prices of certain goods as the inflation level remains moderate with a 1.4% increase by the end of 2021 and stagnation in January.

With relatively stable inflation, the DEPF explained the increase in goods prices with disruptions in the supply chain and the rise in food and energy prices. The government introduced measures to alleviate the impact of the crisis on citizens, the department added.

In terms of foreign trade, Moroccan exports reached MAD 330 billion ($35 billion) at the end of 2021, including phosphates, agriculture, agri-food, automobiles, and pharmaceutical products. But rising imports reinforced the trade deficit that remains lower than pre-COVID-19 levels.

Additionally, the implementation of Finance Law 2022 highlighted a budget deficit of MAD 467 million ($49 million) resulting from an unordinary increase in public expenditures.

As for the economy’s financing, banks recorded a 3% growth in loans by the end of 2021 when a 23.3% increase in foreign direct investment (FDI) and the consolidation of imported capital goods helped in investment growth in Morocco.