Morocco’s GDP growth cools to 1.7% y/y in Q1 2014 on falling agro output

By bne IntelliNews July 1, 2014

Morocco's GDP grew 1.7% y/y in the first quarter of the year, retreating from a 3.8% y/y expansion the previous year, on shrinking agriculture output and a mild expansion in the non-agriculture output, the High Council Planning (HCP) said. The HCP, thus, revised downwards its earlier preliminary estimate of 2.5% y/y GDP growth for Q1 2014.

The value-added agriculture sector, which employs nearly 40% of Morocco’s labour force, shrank 1.6% y/y in Q1, reversing a 15.8% y/y growth in the same quarter of last year. The high prior-year base will continue to weigh on Morocco’s GDP growth in 2014.

Excluding agriculture, Morocco's export-oriented economy grew just 2.1% y/y in Q1 on still weak EU demand despite a stronger manufacturing output.

In nominal terms, Morocco’s GDP rose 1.9% y/y to MAD 220.15bn in Q1.

The mining industry remained strong in Q1 2014 on rising phosphates production. The sector grew 6.4% y/y, reversing a 3.5% y/y contraction in Q1 2013. The water and electricity sector expanded 3.8% y/y, also reversing a 4.8% annual drop the year before.

A weak agriculture output will cut Morocco’s GDP growth to 2.4% in 2014 from an estimated 4.4% in 2013, according to the head of the High Council Planning (HCP), Ahmed Alami.

The forecast GDP growth will generate nearly 60,000 jobs this year, meaning the unemployment rate will likely increase to just 9.8% in 2014 from an estimated 9.1% the year before, Alami said.

The IMF, however, is more optimistic on Morocco’s outlook, forecasting a 3.9% GDP growth in 2014, according to its Spring World Economic Outlook. The EBRD forecasts a 4.2% GDP growth for 2014. 

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