Rabat – After the post-COVID collapse, the inflow of Foreign Direct Investments (FDIs) into Morocco is showing strong signs of recovery.
At the end of the first five months of 2024, FDI surged to MAD 16.1 billion ($1.6 billion), up 19.6% year-over-year, according to recent data from Office d’Echange (OE), the country’s foreign trade watchdog.
This resurgence comes after a significant downturn during the post-COVID period. Although the current figures show promising recovery, FDI levels remain below their pre-pandemic peak.
In 2018, Morocco experienced an all-time high of $3.5 billion in FDI, but this figure plummeted to an estimated $1.7 billion in 2019 as the global economy grappled with the fallout from the COVID-19 pandemic.
The recent upturn in Morocco’s FDI is a bright spot in an otherwise challenging global investment climate. A surge in high interest rates across Europe and the US has driven substantial capital flight from developing countries.
In 2023, investment flows into developing economies dropped by 9%, totaling $841 billion, with developing Asian countries experiencing a 12% decline, as per a January report by the United Nations Conference on Trade and Development (UNCTAD).
Even traditionally strong recipients of foreign investments have been impacted. China, for instance, reported a 6% decrease in FDI inflows in 2023.
In addition, UNCTAD highlighted a concerning drop in international investment project announcements, particularly in project finance and Mergers and Acquisitions (M&As), which fell by 21% and 16%, respectively.
Looking ahead, UNCTAD forecasts a potential modest increase in FDI flows for 2024, contingent on the stabilization of inflation and a subsequent reduction in borrowing costs across major economies.
However, the global investment outlook remains uncertain, clouded by geopolitical tensions and mounting public debt, which could continue to affect foreign investment dynamics.
Read Also: Foreign Investments in Morocco Plunge by 50% in 2023, Echoing Global Trend
