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Saturday, May 25, 2024

Morocco: World Bank Forecasts 1.1% Growth in 2022 and 4.3% in 2023

Moroccan economy’s growth is expected to slow to 1.1% in 2022 before growing back up to 4.3% in 2023, according to the World Bank (WB) forecasts released last Thursday.

“Growth in Morocco is projected to slow to 1.1% in 2022, as agricultural output declines by 17.3% due to the drought. The economy is projected to be driven by a still solid but moderating industrial performance and a faster recovery of tourism. Ongoing reforms are expected to increase potential growth over the medium-term”, the WB said in its latest “MENA Economic News Bulletin”.

The international financial institution lowered its growth forecast for the Moroccan economy previously announced in January, which was around 3.2%.

According to the same source, “this outlook is subject to various downside risks. The war in Ukraine is increasing global commodity prices, which together with the drought, could increase Morocco’s import bill and public subsidies, thereby impacting the current account and the budget balance”.

The Bretton Woods institution also estimates that inflation, after a rate of 1.4% last year, should reach 4% in 2022 in Morocco, before returning to 1.8% in 2023.

The latest edition of the World Bank MENA Economic Update estimates that the Middle East and North Africa (MENA) region’s economies will grow by 5.2% in 2022, the fastest rate since 2016.

However, uncertainty reigns with the unpredictable course of the war in Ukraine and the scientific uncertainty about the evolutionary path of the virus that causes COVID-19.

“The economic recovery may be uneven as regional averages mask broad differences between countries. Oil producers may benefit from elevated energy prices along with higher vaccination rates for COVID-19, while fragile countries lag”, the report said.

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