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Rabat – Morocco’s domestic demand, a measure of expenditures from households, investors, and government, is stagnating in 2023, according to data from the Higher Commission for Planning (HCP).
In a quarterly report published on Monday, HCP explains that domestic demand, a strong indicator of economic growth, stagnated in the first quarter of 2023, showing little change compared to a decline of 1.7% a year earlier.
While domestic demand did not show any significant signs of recovery, it has increased by a modest 0.1%, against a forecasted 1.3% drop, notes the HCP report.
Regarding investment, the growth rate of gross investment (including gross fixed capital formation, change in inventories, and net acquisition of valuables) continued to decline, experiencing a 2.6% decrease in the first quarter of 2023, following a 6.9% drop in the same quarter of the previous year.
Morocco’s economy at large is entering a phase of slow recovery. After last year’s severe drought and consecutive external shocks, economic growth would have averaged 3.5%, up from 0.5% a year earlier.
According to the HCP report, the improved economic prospects are largely supported by the recovery in agriculture activities. At the end of the first quarter of 2023, agriculture activities rose by 6.6% after contracting by 11% a year earlier. Meanwhile, non-agriculture activities rose by 3.2%, up from 2.4% a year earlier.
In the report, HCP explains that inflation remains a pressing challenge to the national economy. A recent report from Morocco’s central bank, Bank Al-Maghrib (BAM), suggests that inflation in 2023 is set to average 5.5%, down from 6.6% a year earlier. Despite the drop, inflation remains elevated, way above the recommended 2%.
Read Also: Morocco’s Central Bank: Inflation To Remain Elevated in 2023 at 5.5%
