Morocco’s economic growth to improve to 3.2% in 2024 despite drought

Morocco’s economic growth would pick up to 3.2% in 2024 from 2.9% expected in 2023, amid persisting drought but improving exports, planning agency HCP said.

The forecast is closer to that of the World Bank which sees the economy growing by 3.1% this year after 2.8% last year.

The agency expects Morocco to reap a meagre cereals harvest amid late rainfall, auguring ill for a struggling farming sector

However, HCP expects foreign demand to grow amid a recovery in Europe, Morocco’s main trading partner.

It also sees domestic demand recovering thanks to the distribution of cash subsidies to needy families which may cushion some of the impacts of persisting inflation.

Inflation is expected to drop to 2.8% in 2024, down from 4.5% in 2023, when higher food prices, in particular, damaged the purchasing power of needy households, said the HCP.

As the government plans to reduce subsidies on cooking gas, which represent 80% of the subsidies budget, Morocco would be able to further cut the budget deficit to 4.5% in 2024, down from 4.7% in 2023, despite increased spending on social protection, it said.