For 2021, the High Commission for Planning (HCP) in Morocco expects the economy to recover to 7.2% after a contraction of 6.3% a year before. Overall, the country’s macroeconomic indicators improved between 2020 and 2021. 

HCP reports that the budget gap reached 6.5% in 2021, from 7.6% in 2020, and the overall debt ratio stood at 90.3% last year, against 92.5% a year earlier. The institution attributes the improvement to the performances of the agricultural sector. "The good distribution of rainfall has allowed cereal production to increase by 221% compared to the previous season. The same trend was observed in the production of non-cereal crops, notably citrus fruits (+29%) and olive trees (+14%), under the positive effect of the relatively mild temperature and rainfall in April and May,” HCP said. This has strengthened the growth in the primary sector, with an estimated 17.9% last year against a decline of 6.9% in 2020.

Furthermore, the improved health situation in the country over the past year has boosted activities in high value-added sectors such as the automotive and textiles industry, thanks to a strengthening of external and domestic demand. "The strong demand from the European Union for ready-made garments has benefited the textile and leather activities, showing an increase of almost 13.5% in 2021, after a drastic drop of 10.6% during the pandemic in 2020. The recovery of the automotive sector, thanks to external demand for electronic components and electrical wires and cables, has benefited the mechanical, metal, and electrical industries with a positive growth of about 8.6% in 2021, " the HCP report reads.

However, despite this recovery, inflation is estimated to be on the rise. It was estimated at 1.8% in 2021 and should stand at that level in 2022. Exports gradually improved (+9.5%) but HCP expects the trade deficit to widen to 16.6% of GDP in 2021 against 14.6% the previous year. Following this trend, financial needs have accentuated to -2.5% of GDP in 2021 against -1.8%, the previous year. "This situation reflects both the fragility of the external trade situation and the inadequacy of national savings which would have reached 28.7% of GDP against a gross investment rate of 31.3% of GDP in 2021," HCP said.

Let’s note that this outlook is higher than that of the IMF, which estimates Morocco's 2021 growth at 5.7%. For 2022, HCP expects lower growth at 2.9% and IMF forecasts 3.1%.

 Moutiou Adjibi Nourou