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Rabat – Morocco’s economy expanded by 3.7% in the last quarter of 2024, down from 4.2% a year earlier.
According to the High Commission for Planning (HCP), the slowdown came as agricultural activity declined, while non-agricultural sectors posted modest gains. The economy continued to rely on domestic demand, but rising financing needs and a widening trade deficit created new obstacles.
Mixed performance across sectors
Agriculture saw a 4.9% contraction, reversing last year’s 1% growth. The fishing sector, however, posted a slight rebound of 0.8% after its 19.2% fall in late 2023.
The secondary sector slowed to 4.9%, compared to 6.9% in the same period of 2023. The slowdown came mainly from extraction industries, which grew by 6.5% instead of 16.1%, and manufacturing, which expanded by 3.7%, down from 7.4%. However, construction and public works accelerated to 7%, up from 2.9%, whereas utilities, including electricity, gas, water, and waste management, rose to 5.7% from 3.6%.
Services rose by 4.2%, outperforming 3.3% from last year. Tourism and hospitality posted a strong 12.8% increase compared to 8.2% in late 2023. Public administration and social security services rose by 3.9%, up from 1%, while trade and vehicle repairs grew by 3.1%, compared to 1.8%. Education, health, and social work expanded by 2.7%, compared to 1.5%.
Some service industries showed weaker results. Business services, including research and development, grew by 5.3%, down from 5.9%. Transport and warehousing slowed to 4.6%, compared to 5.3%, while finance and insurance services increased by 4.3%, down from 5.5%. Telecommunications dropped to 2%, compared to 4.3%, and real estate services dropped to 1.9%, from 3.3%.
Shifts in demand and investment
Domestic demand increased by 7.6%, slightly below the 8.1% recorded a year earlier. Its contribution to overall growth fell to 8.9 percentage points, from 9.4.
Household consumption rose by 4.1%, down from 5.1% in the previous year, contributing 2.6 points to growth instead of 3.2. Public spending on goods and services, however, grew by 4.8%, up from 3%, with a contribution of 0.9 points, compared to 0.6.
Investment, including fixed capital, stock variations, and net acquisitions of valuables, climbed by 15.3%, compared to 16.6% a year earlier, contributing 5.4 points to growth instead of 5.5.
Trade deficit widens
Both exports and imports increased drastically. Imports grew by 15.6%, compared to 12.5%, which resulted in a negative contribution of 9 points, worse than the 7.7 points recorded a year earlier. Exports rose by 9.2%, up from 5.5%, contributing 3.8 points instead of 2.5.
The trade balance remained a drag on economic growth. The net contribution of external trade stood at -5.2 percentage points, unchanged from the previous year.
Inflation and rising financing needs
Gross Domestic Product (GDP) at current prices increased by 6.2% in the fourth quarter of 2024, compared to 8.4% in late 2023. The general price level rose by 2.5%, down from 4.2%, showing a slowdown in inflation.
Despite this, Morocco’s financing needs grew. With GDP rising by 6.2% and net income from abroad increasing by just 0.9%, total national income slowed to 5.8%, down from 8.7% a year earlier.
Final consumption spending rose by 4.9%, down from 5.7%, while national savings accounted for 28.8% of GDP, slightly up from 28.2%. Meanwhile, total investment represented 32% of GDP, up from 29.6%. This widened the financing gap, as Morocco’s economy required external funding equivalent to 3.2% of its GDP, compared to 1.4% a year earlier.
Morocco’s economy continued to grow but faced headwinds. Slower expansion in key sectors, rising financing needs, and a widening trade deficit noted the challenges ahead. Inflation showed signs of control, yet external imbalances could threaten future stability.
