Morocco’s GDP growth spikes to 4.5% in 2015 on strong agro output

By bne IntelliNews June 7, 2016

Morocco’s economy expanded by a real 4.5% in 2015, accelerating from a 2.6% growth the preceding year, solely on strong agriculture output and related harvest that mitigated weakening activity in the non-agro economy and sluggish domestic demand, the High Council Planning (HCP) said.

GDP growth is expected to decelerate in 2016 to 2.3% due to the drought in the winter that cut agricultural output. Sluggish growth in Europe – Morocco’s main trade partner – and continued modest non-agricultural growth will also dampen the economic expansion, according to the EBRD.

 Job losses in the value-added agriculture sector largely offset rising job creation in the services and manufacturing sectors, boosting Morocco's unemployment rate to 10.0% in the first quarter of 2016 from 9.5% in Q4 last year and 9.9% in Q1 2015. The jobless rate has thus hit the long-standing benchmark of 10% in a warning sign to the government that has failed to largely diversify its agro-dependent economy.

In 2015, the jobless rate also eased to 9.7% from 9.9% the year before.

The value-added agriculture sector, which employs nearly 40% of Morocco’s labour force, grew 12.8% last year, reversing a 2.2% annual contraction the year before, amid favourable weather conditions that boosted Morocco's agricultural output. The prior-year low base thus played a key role.

Excluding agriculture, Morocco's export-oriented economy grew a mild 1.9% in 2015, slowing from 2.5% expansion in 2014.

In nominal terms, Morocco’s GDP grew 6.3% y/y to MAD982.23bn in 2015.

The HCP underscored a 0.9% rise in domestic demand in 2015, down from a 1.2% expansion the preceding year.

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