The Moroccan economy is expected to contract by 2 percent in 2020 due to the effects of the health crisis linked to Covid-19, according to a new report by the European Bank for Reconstruction and Development (EBRD).
According to the report, entitled “The EBRD’s Regional Economic Outlook,” the slowdown in the Moroccan economy is primarily due to a sharp decline in tourism, but also caused by “measures to contain the spread of the pandemic, likely poor harvests, recession in Europe and falling commodity prices.”
As for growth in 2021, it is favoured by “the development of non-agricultural sectors, particularly the mining industry, mainly due to the negative impact of the coronavirus pandemic on phosphate production in China.”
The EBRD said “rising social discontent, a slower than expected recovery in European partner countries and the continued vulnerability of agricultural production due to adverse weather and price developments could be risk factors hampering growth in Morocco”.
Morocco is the world’s second largest producer of phosphates and could therefore benefit from this, EBRD added.
As for the economic forecast for 2021, EBRD envisaged a 4 percent recovery.
On average, the region’s economies are expected to contract by 0.8 percent in 2020 before bouncing back to 4.8 percent in 2021, the report noted.
“The other economies in the region, Jordan, Lebanon and Tunisia, are also expected to experience slower growth this year. Egypt, on the other hand, is projected to have a low growth rate of 0.5 percent,” EBRD said.
In addition to this economic deceleration, the Covid-19 pandemic will lead to a substantial contraction in output, at least in the short term, according to the report.
Assuming that domestic lockdown measures are gradually eased, with a return to normality in the second half of the year, production in the EBRD regions is expected to contract by an average of 3.5 percent in 2020, followed by a recovery in 2021, with an average growth rate of 4.8 percent in 2021.
“While this scenario assumes a modest impact of the crisis on the long-term production trajectory, the pandemic may have longer-term economic, political and social impacts,” the report concluded.
HA/lb/as/APA