publication October 3, 2018

Morocco's Economic Outlook - October 2018

Morocco’s economic growth remains sluggish  in  2018  despite  unexpected  positive  growth  of  cereal  production.  GDP growth decelerated from 3.5  percent  in  the  first  quarter  of  2017  to  3.2  in  the  same  period  of  2018.  On the supply side,  the  economic  slowdown  is  mainly  due  to  the  sharp  decline  of  agricultural  value-added  growth  from  14.8  percent  in  2017-Q1  to  2.5 percent  in  2018-Q1,  which  is  only  partially  compensated  by the good  performance  of  non-agriculture  activities.  The  latter  increased  by  3.4  percent  (vs.  2  percent  only  in  2017-Q1),  mainly  driven  by the  combined  rebound  of  secondary  and  tertiary  activities.  The  increase  has  been  particularly  marked  in  extractive  industry  due  to  the  continued  upturn  of  phosphate  production  and  exports. 

With  a  return  to  normal  rainfall  conditions, agriculture GDP is projected to decline in 2019, thus dragging down overall  GDP  growth  to  2.9  percent.  Yet,  nonagricultural GDP is expected to sustain its performance  driven  by  more  dynamic  manufacturing and services sectors, which  will be the key growth drivers, with the  former  continuing  to  benefit  from substantial foreign investments into automotive industries.