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publication January 12, 2022

Morocco Economic Monitor, Fall 2021: From Recovery to Acceleration- Executive Summary


After an unprecedented shock in 2020, Morocco is entering a phase of normalization as the COVID-19 pandemic eases, the agricultural sector recovers, and external demand picks up. However, the recovery remains incomplete and asymmetric.  

As the crisis subsumes, the fiscal deficit is resorbing. A more moderate deficit than many of its peers at the start of the pandemic has allowed Moroccan authorities to operate a countercyclical increase in public spending in response to the crisis.  

With the recovery in exports lagging that of imports, last year’s improvement in the current account is partially reverting. The trade and current account deficits are widening again, although the comfortable evolution of the stock of foreign exchange reserves demonstrates that this trend is not resulting in balance of payments pressure.  

Despite signs of normalization, banking sector dynamics suggests that some vulnerabilities persist. Monetary policy continues to support the recovery, with central bank injections increasing again in third quarter of 2021. However, credit growth remains timid, with consumer credit close to a full recovery while investment credit is still edging downwards.  

With the normalization of agricultural production, GDP growth is expected to slow to 3.2 percent in 2022. Following a successful harvest season in 2021, agricultural production is expected to contract slightly in 2022, which will reduce the overall growth rate of the Moroccan economy, as the strong base effect of 2020 wears off. This outlook, however, is subject to significant uncertainty, as the COVID-19 shock has left scars on the Moroccan private sector and as risks to the global economy intensify, especially in view of the spread of emergent COVID-19 variants.  

To embark on a growth trajectory consistent with the ambitions of the New Development Model, the sustained implementation of a cross-cutting policy agenda will be key.