World Bank highlights resilience of Morocco’s financial sector to drought

Despite consecutive dry years, Morocco’s banking sector has shown resilience and stability, the World Bank said.

“Stress tests in Colombia, Morocco, and Mexico indicate that overall physical risks such as droughts and floods as well as transition risks are relatively benign for the financial system as a whole,” the World Bank said in its “Finance and Prosperity Report 2024”.

The report also mentions the innovation of Morocco’s central bank in conducting a “first-of its-kind drought scenario.”

Morocco’s planning agency HCP said drought would ditch this year’s growth rate to 3% from an earlier estimate of 3.4%.

The rate is almost similar to that of the IMF, which expected the economy to grow 3.1% this year.

HCP expects the economy to recover to 3.4% in 2025, on the hypothesis of a close to average cereals harvest.

It said that non-farming sectors, especially manufacturing, would make up for the loss of the agricultural sector.