Rabat – The High Commission for Planning (HCP) has reported a sharp slowdown in national economic growth in 2016 to 1.2 percent versus 4.5 percent in 2015.
This decline was attributed in particular to a marked decrease in rainfall, which has affected the growth of agricultural activity, while non-agricultural activities continue to show a moderate growth rate. The HCP noted a 12.8 percent decline in value added by the agricultural sector (excluding fishing), compared to a 11.9 percent increase in 2015 and a 2.2 percent growth in value added from other non-agricultural sectors instead of 1.8 percent one year earlier.
“Economic growth has been driven by the final consumption of households and investment in the context of controlled inflation and a growing need for financing of the national economy,” noted the HCP in the closure of the accounts of 2016.
This decline is also attributable to an increase of 8.5 percent in volume of net taxes on subsidies on products instead of 18.1 percent in the previous year. In this context, the growth rate of the gross domestic product, excluding agriculture, fell from 3.7 percent in 2015 to 3.1 percent in 2016, highlighted the HCP.
At current prices, GDP grew by 2.8 percent in 2016 compared to 6.8 percent a year earlier, generating an increase in the general price level of 1.6 percent instead of 2.1 percent.
However, Morocco’s investment effort has been made clear, showing a 9.3 percent growth rate in 2016. The sharp decline in national economic growth versus the increase of investments confirm the recent World Bank findings showing that in Morocco, investment is severely lacking in efficiency, since it does not translate into gains in terms of economic growth and job creation. The Bretton Woods institution has also shown that Morocco’s investment effort since the 2000s is enormous, averaging 31 percent of GDP, while its performance is still low.
The HCP’s overview of the evolution of the national economy in 2016 also reveals another remarkable and persistent observation: the domestic economy is based on domestic demand. In 2016, it rose by 5.5 percent, compared with 1.9 percent in 2015, driven in particular by the “considerable increase” in investment and the improvement in consumer spending on households. These increased by 3.4 percent in 2016 compared to 2.2 percent in 2015, contributing 1.9 percentage points to GDP growth instead of 1.3 percentage points in the previous year.
Similarly, public administrations final consumption fell to 2.1 percent compared to 2.4 percent in 2015, with a 0.4 percent contribution to growth. Gross fixed capital formation (investment) achieved significantly better results, with a 9.3 percent increase instead of a near-stable one year earlier, contributing with 2.6 points in 2016 economic growth compared with 0.1 point in 2015.
In these conditions, the contribution of domestic demand to GDP growth was 5.9 points instead of 2.1 points in 2015. On the other hand, external trade made a negative contribution to GDP growth In the order of -4.7 points in 2016 instead of a positive contribution of +2.4 points a year earlier. This sharp upturn in investment is supported by the 27.5 percent surge in imports of capital equipment and the 11.7 percent jump in equipment loans to MAD 158.01 billion in 2016.
