Morocco’s real gross domestic product (GDP) is expected to contract by 6.3% in 2020 and the return to the pre-pandemic level of the novel coronavirus (covid-19) would not be possible until 2022, Javier said. Diaz Cassou, Senior Economist of the World Bank (WB) in Morocco.
“Although the Moroccan economy is showing some signs of recovery, the situation remains fragile given the recent deterioration of the epidemiological situation. In this uncertain context, a real GDP contraction of 6.3% is expected in 2020, while a return to the level prior to the pandemic should not take place before 2022 ”, announced Mr. Cassou during the round table. dedicated to the presentation of the monitoring report of the economic situation of Morocco – From emergency response to recovery.
Mr. Cassou pointed out that the Covid-19 pandemic has abruptly interrupted more than two decades of sustained socio-economic progress in Morocco. “In 2020, the country is expected to experience its first recession since the 1990s, and the economic contraction that took place in the second quarter, largely coinciding with containment, is the largest on record,” he added.
And to stress that this is the result of the combination of supply and demand shocks and external shocks caused by the pandemic, but also the effects of unfavorable climatic conditions on agricultural production. The crisis had a severe impact on jobs and household incomes, causing unemployment to peak and worsening poverty and vulnerability indicators.
“The Moroccan GDP has experienced a very marked fall under the 2nd quarter of the year 2020 going up to -15%, with a slight economic recovery in the 3rd and 4th quarters,” he said, noting that between the 3rd quarter of 2019 and the 3rd quarter of 2020, the Moroccan economy lost more than 580,000 jobs, especially in rural areas.
Also, as in other countries around the world, the current crisis will cause the budget deficit to increase significantly to 7.8% of GDP in 2020, and public debt is expected to exceed 76% of GDP. As for the current account deficit, it is also expected to increase to 6% of GDP this year.
Despite the gravity of the crisis, Morocco is better placed than other emerging economies to weather this storm thanks to the credibility of its macro-fiscal framework, its relatively large external buffers and its easy access to international financial markets, explained Mr. Cassou who is also author of this report produced in collaboration with Amina Iraqi, Economist at the WB.
For the year 2021, several risks must be closely monitored, namely the room for maneuver of economic policy to deal with a possible worsening of the health or international crisis, the external financing conditions which could deteriorate, the financing needs which are high, the evolution of overdue deadlines in a context of increasing payment deadlines, the significant accumulation of contingent liabilities linked to the guarantee programs put in place by the government and the need to push growth economic above pre-pandemic levels.
The Morocco Economic Situation Monitoring Report, entitled “From Emergency Response to Recovery”, which has just been published, is a biannual report from the Economic Department of the World Bank. “This semi-annual report is part of a new series that we are going to start publishing specifically on Morocco,” said Eric Le Borgne, Head of the Macroeconomic Trade and Investment Department.
Presented in the presence in particular of the director of the Maghreb region at the WB, Jesko S. Hentschel, this report presents the latest trends in the economy and the effects of economic policies. This December 2020 issue includes a chapter on the impact of the pandemic on the formal private sector. It presents the results of a survey of more than a thousand formal businesses before and after the onset of the pandemic, and also touches on a discussion of measures that could accelerate private sector recovery.