Rabat – Morocco’s economy is set to experience a rebound, with its Gross Domestic Product (GDP) projected to grow by 3.1% in 2023, the European Bank for Reconstruction and Development (EBRD) reported today in its latest Regional Economic Prospects forecast.
The recovery can be attributed to the revival of the agriculture sector and a moderation in inflation, as well as Morocco’s removal from the Financial Action Task Force’s (FATF) Grey List which provides a boost to investor confidence, the report noted.
In its report, the EBRD predicts that Morocco will continue its growth trajectory in 2024, reaching pre-pandemic levels with a projected growth rate of 3.2%. The bank emphasizes that the implementation of key reforms could potentially provide an additional boost to the economy.
Nevertheless, the EBRD highlights that Morocco remains susceptible to fluctuations in hydrocarbon prices since it heavily relies on energy imports. Factors such as global supply-chain disruptions and adverse global conditions could also pose challenges to Morocco’s economic growth.
A decline in demand from Europe and tighter financial conditions resulting from worsening global conditions may pose further challenges for the country, said the EBRD report, underscoring that Morocco experienced an economic slowdown in 2022 when its growth rate stood at merely 1.1%.
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This lackluster performance was primarily attributed to the contraction of the agriculture sector caused by a severe drought. However, non-agricultural sectors such as tourism and trade played a crucial role in driving growth, accounting for a 3.1% expansion, as outlined in the EBRD report.
Furthermore, the report sheds light on the inflationary pressures Morocco has faced over the past year. Inflation accelerated significantly in 2022, reaching an average rate of 6.6%, compared to 1.4% in 2021.
Rising prices in food and transportation were the primary drivers behind this increase, posing challenges for consumers and businesses alike.
Other international financial institutions, such as the World Bank and Credit Agricole’s Economic Research, have also issued reports on Morocco’s economic growth.
Credit Agricole’s Economic Research’s recent report projects 3.2% growth in the North African country’s gross domestic product (GDP) in 2023, up from 1.3% in 2022.
Meanwhile, the World Bank forecasts that Morocco’s economy will grow by 3.5% in 2023 and 3.7% in 2024.
