Economic growth: The HCP expects +0.8% in the third quarter

Economic growth: The HCP expects +0.8% in the third quarter

Economic activity should show weak momentum in Q3. The national economy should record an increase of 0.8% in the third quarter of 2022, in annual variation, instead of +8.7% in the same quarter of 2021.

This is what the High Commission for Planning anticipates in its recent economic update. “In the third quarter of 2022, the growth outlook for the global economy would remain marred by high uncertainties. International trade in goods should benefit from the relative improvement in the trade of advanced economies and China, but its dynamics would remain dependent on the development of the trajectory of global inflation, geopolitical tensions in Ukraine, the situation health and the impact of the tightening of monetary policies on investment and consumption”, we note from the HCP.
And to specify that “in this context, the world demand addressed to Morocco would increase by 4.2%, in annual variation, instead of +7.3% during the same period a year earlier”. In terms of forecast, national domestic demand would remain moderate.

The context will indeed be marked by the continued slowdown in household consumption and investment. Thus, national domestic demand should settle in the third quarter of the year at around 1.6% against 8% observed in the same period of last year. Under these conditions, the HCP estimates that value added excluding agriculture would grow by 2.9% in the second quarter of 2022, in annual variation. “Most of this increase would be attributable to the tertiary sector, in particular public services and tourism, while the secondary sector should continue to recover at a moderate pace, driven by an increase in the value added of manufacturing industries of 1.3%. “, we learn. Agricultural activity is expected to post a contraction of 14.1%.

By analyzing the economic dynamics in the second quarter, the HCP indicates that economic growth would have settled at 0.9% against 0.3% observed in the first quarter of the year. “This slight recovery would have been, in particular, attributable to the 3.6% increase in value added excluding agriculture. The agricultural value added, for its part, would have continued its decline at the rate of -16.1% during the same period”, explains the HCP in this sense. Indeed, the second quarter was marked by a continued decline in agricultural activities. Referring to the HCP, the 32% reduction in cumulative rainfall compared to a normal year, at the end of May 2022, would have led to a 17.1% drop in crop production. According to the findings made in the context of this economic update, we note the recovery in the production of seasonal market gardeners compared to the first quarter. The latter would have been accompanied by an improvement in their exported quantities, particularly in tomatoes and small vegetables.
With regard to the animal sectors, the HCP indicates that production would have increased by 2%, in annual variation. It would have been particularly supported by the recovery of the poultry sector, after two years of poor performance.

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At the same time, non-agricultural activities continued to show resilience. The positive trend observed in this direction is mainly driven by the strengthening of public service activities and the continued recovery of tourism, transport and cultural services.

According to the HCP, the added value of the tertiary branches increased by 5% in the second quarter of 2022, contributing 2.5 points to overall economic growth. Similarly, the added value of the secondary sector is expected to have recovered by 0.8% in the second quarter of 2022, in annual variation, after falling by 0.9% in the previous quarter. Moreover, the construction sector seems to have continued its slowdown for the third quarter in a row. “Its added value would have increased by 0.7% in the second quarter of 2022, instead of an increase of 1.8% in the previous quarter”, can we conclude from the HCP. Note that the HCP observes in the second quarter of 2022 a vigor in trade driven by prices, a strong moderation in domestic demand, an escalation in consumer prices and a deceleration in monetary growth.

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