Rabat – Morocco’s economic growth is set to reach +3% in 2023, and food-related inflationary pressures are expected to ease, has estimated a new report by Allianz Trade, an international trade credit insurance company.
Titled “Economic growth within reach, with risks tilted to the downside,” the recently published report attributed the economic growth to the agricultural sector’s recovery.
According to the report’s data, rainfall increased by 88% between September 2022 and early February 2023, averaging 72 millimeters, while the country’s water resources exceeded 2.1 billion cubic meters, which is double the size of the same period in 2022.
However, Morocco’s reliance on agriculture puts its economy and citizens at risk in times of drought. “Exposure to drought and/or a resurgence of the price of commodities that Morocco imports could deteriorate living standards even further,” the report says.
US credit rating agency S&P Global Ratings also argued that agriculture accounts for roughly 10% of Moroccan GDP and 30% of employment, which makes the Moroccan economy particularly “vulnerable to weather and rainfall patterns.”
A number of risks persist, however, the report noted, citing the “widening gap between rural and urban standards of living,” as well as “increased diplomatic tensions” with neighboring countries and the EU, Morocco’s largest trading partner.
Read Also: World Bank Projects Morocco’s Economic Growth to Average 3.5% in 2023
A rise in the price of the commodities that Morocco imports could also weigh on the country’s economic outlook in 2023, the report added, detailing: “The [Moroccan] economy is heavily dependent on energy imports and therefore on volatile oil and gas prices.”
The report highlighted that Morocco has one of the most diverse economies in North Africa, with ongoing efforts to reduce import dependence and consolidate the fiscal profile.
The diversification of the Moroccan economy led to an increase in exports in the automotive, textile and agrifood sectors, which rose by 33%, 21% and 16% year-on-year, respectively, the report noted.
Allianz Trade’s report comes as Moroccan households painfully navigate a severe cost of living crisis in the context of an ongoing, even deepening global economic crisis.
As Morocco looks to protect itself against the repercussions of disruptions in the global market, King Mohammed VI recently emphasized the urgent need for the country to achieve sovereignty and become less reliant on imports.
“Our industry is called upon today, more than ever, to promote local production in a competitive manner in order to reduce this dependence, enhance our resilience, increase our competitiveness, and consolidate Morocco’s position in promising sectors,” the monarch said late last month in a message to participants of the first edition of the “National Industry Day.”
