Morocco’s GDP growth speeds up to 4.3% y/y in Q2 on rebounding agro output

By bne IntelliNews October 2, 2015

Morocco’s GDP growth accelerated to 4.3% y/y in the second quarter of the year from 4.1% y/y in Q1 and a mild 2.6% annual expansion in Q2 2014, the High Council Planning (HCP) said in a provisional estimate. A low prior-year base coupled with strong output of the value-added agriculture sector largely offset a still subdued activity in the non-agro sector.

Morocco’s GDP growth will accelerate to 4.6% in 2015 underpinned by a rebound in agricultural activities, strong growth in high value-added exports (in newly developed sectors such as automobiles, aerospace and electronics) and lower oil prices, the EBRD forecasts.

The value-added agriculture sector, which employs nearly 40% of Morocco’s labour force, climbed 14.9% y/y in Q2, speeding up from 12.0% annual hike in the previous quarter, and reversing a 3.6% y/y contraction in Q2 2014, amid favourable weather conditions that boosted Morocco's agricultural output.

Excluding agriculture, Morocco's export-oriented economy grew a lukewarm 1.6% y/y in Q2, slowing from 2.0% y/y in Q1 on lower phosphate output. The hotels and restaurants sector remained in the red, falling 3.4% y/y in Q2, worsening from a 1.0% annual drop in Q1.

Late in September, Morocco’s central bank maintained its benchmark interest rate unchanged at 2.5%, underscoring the subdued medium-term CPI inflation outlook at 1.8% in 2015 and an average of 1.5% price growth over the next six quarters.

The central bank remains upbeat on the 2015 GDP outlook despite cutting this year’s economic growth projection to 4.6% from the previous 5.0%. The 2015 GDP growth will, however, accelerate from last year’s 2.4%.  Growth will be supported by strong agriculture output that will mitigate the still subdued non-agro growth at 3.3% in 2015. In 2016, Morocco’s GDP growth will brake to 2.4% on cooling agriculture output, according to the central bank.

In nominal terms, Morocco’s GDP grew 5.4% y/y to MAD242.7bn in Q2, slowing from a 5.9% annual rise in Q1.

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