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Rabat – The World Bank forecasts the Moroccan economy to slow to 1.1% in 2022 before rebounding to 4.3% in 2023.
In its latest “Mena Economic Update,” the World Bank noted that the projected slowdown in the country’s economy could be mainly due to a 17% decline in agricultural output amid a severe drought.
“The economy is projected to be driven by a still solid but moderating industrial performance and a faster recovery of tourism,” it said.
Public debt is projected to stabilize below 80% of GDP while the current account deficit is expected to widen to 5.5% of GDP due to higher energy and food import bills.
Read Also: World Bank Forecasts 3.2% Economic Growth for Morocco in 2022
Morocco has experienced several months of drought, and with the impact of the Russia-Ukraine war in global commodity prices, the country is most likely to see an increase in its import bill and public subsidies.
The Ukrainian crisis is set to further aggravate disruptions in the global supply chain, as production slows down in Europe as well.
Morocco’s slow economic recovery could exert additional pressure on household and firms’ debts, the World Bank noted, arguing that rising prices and decreasing agricultural revenues are expected to slow down in post-COVID-19.
Morocco’s GDP growth rebounded to 7.4% in 2021 against 6.3% in 2020.
The 2021 economic growth was driven by an increase in cereal production, solid exports and remittances, as well as a significant progress on COVID-19 vaccinations.
The UN reported that Morocco was among the only five African countries that have reached the goal of vaccinating at least 40% of their populations by the end of 2021.
Of the MENA region, the World Bank stressed that oil producers may benefit from elevated energy prices along with higher COVID-19 vaccination rates. But vulnerable countries might face several economic challenges.
The financial institution forecasts that 11 out of 17 MENA economies may not recover to pre-pandemic levels by the end of 2022.
