Morocco’s economy to contract by 1.8% in the second quarter

Morocco’s gross domestic product is set to recede in the second quarter by 1.8% as the coronavirus and the measures relating to it halted most of services and hit sectors that are vital to foreign currency revenues, the high commission for planning HCP said.

The economy is expected to grow only by 1.1% in the first quarter as drought further worsened Morocco’s macro-economic indicators.

Exports are plunging with faltering foreign demand on Morocco’s sales of cars, phosphates, textile and a suspension of tourism due to the confinement.

In April only, Morocco’s economy is expected to have lost 1 billion dollars due to the confinement.

To compensate for the lack of exports and a trade deficit set to deepen, Morocco scrapped a cap on foreign debt and has tapped into the $3 billion precautionary liquidity line offered by the IMF to be followed by an international bond.

The IMF liquidity line is expected to help the country pay its imports and send a positive signal to foreign investors.