Rabat – Moroccan households’ confidence is at its lowest level since the 2008 global economic crisis, reflecting deep uncertainty about the state of the Moroccan economy.
According to new data from Morocco’s High Commission for Planning (HCP), the country’s Household confidence index, which tracks households’ attitudes on the state of the economy, dropped to 46 points at the end of 2022, down from 61 points the previous year.
Increased confidence in the economy translates to higher levels of spending leading to economic growth. Low confidence in the economy prompts households to lower spending, which in turns results in slower economic growth.
The HCP household confidence index compounds data on households’ perception of their standards of living, unemployment, spending, and financial situation.
Living standards in free fall
The components of the LCI relate to households’ perception of changes in their living standards, unemployment, the opportunity to purchase durable goods, and their financial situation.
At the end of 2022, 83% of Moroccan households said that living standards have deteriorated in the past year, while only 12% reported that living standards remained unchanged, and a mere 5% of households reported improved living standards.
Looking forwards, more than half of the surveyed households (52%) said they expect living standards to continue dropping, against 38% who believe their living standards would remain unchanged, and only 9% reported that they expect living standards to improve.
Households’ outlook on unemployment is also at an all-time low since the index’s creation in 2008. 85% of households said they expect unemployment to go higher, while only 5% said they expect unemployment to ease.
When asked whether it’s a good time to buy durable purchases — products that are used frequently with a service span exceeding three years such as cars — nearly 80% of the surveyed households said that it is not a good time to make such purchases.
Regarding the last sub-index tracking households’ financial situation, the sub-index equally dropped to an all-time low since 2008.
52% of households said that their income is sufficient to cover their expenses, while 45% said that they were either in debt or resorting to their savings to cover rising expenditures. Only 3% of households declared that their savings have not been negatively affected by the global economic downturn.
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