Morocco’s Economic Growth Rises to 4.3% in Q3, but Challenges Linger

Rabat – Morocco’s economy recorded a growth rate of 4.3% during the 2024 third quarter, up from 3% in the same period last year.

This economic upswing is largely due to a surge in domestic demand and comes against the backdrop of controlled inflations, data from the High Commission for Planning (HCP) shows.

Though the economy continues to face obstacles related to increased financing needs, economic performances showed a mixed tendency during the third quarter.

Non-agricultural sectors performed strongly, with a 5.1% growth in volume while agricultural activities contracted by 5.2%, dragging down the overall primary sector.

Secondary sector surges

The secondary sector led the economic affluence with a vigorous 7.6% upturn, compared to a mere 1.1% increase in Q3 2023. This was driven by substantial gains in key industries:

– Mining and extractive industries grew by 15.9%, rebounding from a 3.3% decline the year prior.

– Manufacturing output increased by 7.5%, a substantial leap from 1.8%.

– Construction and public works recorded a 6.9% growth, compared to 0.9% in the previous year.

– Utilities, including electricity, gas, and water services, grew by 3.4%, up from 1.5% last year.

Tertiary sector grows steadily

The services sector posted a moderate yet noticeable improvement, growing by 3.8% in Q3 2024 compared to 3.6% the previous year. Key contributors included:

– Transport and logistics, which expanded by 4%, up from 3.1%.

– Public administration and social security services, which rose by 3.7%, nearly doubling last year’s growth of 1.5%.

– Retail and vehicle repair services, which increased by 3.2%, up from 1.9%.

Meanwhile, some tertiary activities, however, slowed down, such as hospitality and food services, plummeting to 11.2%, as well as financial services which dropped by 3.1%, lower than the 4.1% growth last year.

The primary sector experienced a 4.1% decline which shows a 5.2% drop in agricultural output. Meanwhile, the fishing industry expanded by 12%, though growth slowed compared to the remarkable 71.6% recorded in Q3 2023.

Inflation eases, GDP growth accelerates. But at what cost?

Morocco’s Gross Domestic Product (GDP) grew by 4.3% at constant prices in the third quarter of 2024, driven by an 8% rise in net taxes on products.

However, at current prices, the increase was more modest at 6%, down from 10.2% in the same period last year. Inflation eased drastically during this time, with the general price level rising by just 1.7%, a sharp drop from 7.2% a year earlier.

Despite these slightly positive indicators, many Moroccans continue to struggle with high living costs. Prices for essential goods, from food to energy, remain out of reach for a large portion of the population and limit the tangible benefits of lower inflation. For many households, the cost of daily necessities remains a persistent burden.

While non-agricultural sectors have demonstrated pliancy, the agricultural sector and certain services continue to face difficulties. The improved GDP growth and reduced inflation mark progress, but structural financing gaps and the need for an evened recovery across all sectors underlined the work ahead.