World Bank Expects Morocco’s Economic Growth to Average 3.4% in 2024

Rabat – Morocco’s economic growth is expected to continue to slow in 2024, growing at 3.4%, slightly higher than the projected 3.1% for 2023, according to a publication from the World Bank (WB).

After a staggering post-pandemic rebound of 7.9% in 2021, Morocco’s economic growth took a hit in 2022, slowing down to an estimated 1.2% on the backdrop of the lingering disruptions to the global supply chain, and the drought that had crippled the country’s agriculture, a sector that makes up 14% of the country’s Gross Domestic Product (GDP).

The economic downturn in Morocco echoes regional and global trends, WB data indicates.

Noting the overall economic situation in the Middle East and North Africa, the WB publication explains that: “As world growth further slows in 2023, the MENA region is expected to follow suit.”

The region’s oil-exporting countries, which benefited from a rise in energy prices in 2022 are set to see the sharpest deceleration in growth.

Despite unwinding energy prices, growth in MENA’s oil-exporting countries is expected to outmarch growth in non-oil-exporting countries, with the exception of Egypt.

The tightening of monetary policy across the region is also expected to weigh down on growth. Over the past two years, central banks in Morocco and across the region have adopted an aggressive monetary policy, hiking interest rates to curb inflation.

While higher interest rates make loans more expensive, slow down expenditure, and bring down prices, the measure also restricts the flow of investments and causes a rise in unemployment levels.

The WB publication explains that despite the tighter monetary policy, inflation will persist in the short run in the MENA region.

The report further warns that even should inflation be short-lived, it is likely to result in long-term development challenges.

Rising food prices are especially weighing down on households in the region, making it hard for families to secure basic food commodities.

Food price inflation affects the poor in the MENA region far more than in other developing countries as average food inflation in the region reached 29% between March and December 2022, a far cry from the 19.4% overall inflation rate.