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Laayoune – Morocco’s “economy could decelerate sharply in 2022,” said the World Bank’s Spring 2022 Economic Monitor report, released on Wednesday, July 20.
The expected 1.3% growth rate is lower than last year’s rate, when the economy grew by 7.9%.
The World Bank cautioned that the increased frequency of rainy seasons could cause droughts to become a structural challenge, which would have a severe long-term impact on the Moroccan economy.
The report also included that between 1960 and 2020, the availability of renewable water resources decreased from 2,560 cubic meters to about 620 cubic meters per person per year, placing Morocco in a state of “structural water stress.”
Morocco nevertheless built more than 120 large dams during the same period, increasing the total water storage capacity by tenfold.
The report added that the volume of water stored in the country’s main dams reached a critically low level of 33% this year, “prompting the authorities to adopt various emergency measures.”
According to the International Finance Corporation (IFC), these reforms include appropriately pricing the scarce water resources, developing effective mechanisms for allocating water through a tradable quota system, and producing and disseminating accurate and comprehensive data on water resources and their use.
The World Bank’s report also focused on the impact of high inflation rates, which rose due to the Ukraine Crisis, predicting that “the pace of consumer price inflation will accelerate to 5.3 percent this year, up from Only 1.4 percent in 2021,” which may affect the purchasing power of Moroccan families from the poorest and most needy groups.
Read also: Consumer Prices in Morocco Continued to Rise in March
The report further noted that the government’s support to farmers and consumers through subsidies have led to an increase in spending needs, while the increase in global energy and food prices and a decrease in domestic production of grains have led to an increase in import requirements.
