L’Moroccan economy faces complex challenges, marked by water stress and drought, persistent unemployment and significant external risks. However, the relative control of inflation and the solidity of foreign trade, in particular thanks to the dynamism of exports, make it possible to maintain a moderate growth trajectory while waiting for better days. Thus, the economic situation in Morocco, as described in the latest report on monetary policy from Bank Al-Maghrib, shows contrasting trends in key sectors.
En terms of employment, the national unemployment rate continues to pose a problem and the government has still not found a way to revive the employment machine, while a good part of unemployment can be explained by bad campaigns agricultural sectors that have followed one another in recent years. In 2024, unemployment increased to 13.1%, after 12.4% in 2023. This increase mainly results from the loss of 82,000 jobs in rural areas, particularly in the agricultural and construction sectors. Despite job creation in industry and services, the net loss of jobs in the aforementioned sectors has exacerbated overall unemployment. The activity rate is also down, going from 44.8% to 44.2%. Youth unemployment has never been so high.
According to the wali of Bank Al-Maghrib, monetary policy cannot, on its own, eradicate this scourge. This would, according to him, require deeper and more courageous reforms, including a more efficient education system. Other macroeconomic indicators, for their part, show more encouraging signals. Particularly in terms of inflation. Because, after high inflation at 6.1% in 2023, Bank Al-Maghrib forecasts indicate a marked deceleration to 1.3% in 2024, before rising slightly to 2.5% in 2025. Inflation below The underlying rate, which excludes food products at volatile prices, stabilizes around 2%, confirming relative control of internal inflationary pressures. This favorable development is attributed to the fall in prices of volatile food products and a moderation in producer prices. Inflation expectations collected from financial sector experts also fell to 2.2% in the medium term, compared to 2.7% in the previous quarter.
External exchangess
Morocco’s external accounts show a slight widening of the trade deficit, with a 5.5% increase in exports compared to a 3.7% increase in imports. Exports were driven by the automotive (+8.5%) and aeronautics (+20.3%) sectors, while phosphates and their derivatives recorded a notable increase of 14.1%. Imports, for their part, increased mainly due to capital goods (+9.1%) and semi-finished products (+8.6%). However, the energy bill recorded a reduction of 4.1%. Tourism receipts continue to support the balance of payments, with growth of 7.1% in 2024, while transfers from Moroccans living abroad (MRE) maintained a solid rate of growth (+3.3%). , and should reach 121.8 billion dirhams in 2025. The current account deficit is thus contained at 1.4% of GDP in 2024, an improvement compared to 2023.
Balance of risks
Bank Al-Maghrib continues to closely monitor the balance of risks affecting the Moroccan economy. Internationally, risks linked to economic fragmentation, aggravated by the war in Ukraine and tensions in the Middle East, continue to weigh on the global economy. The volatility of energy and food prices, due to these geopolitical tensions, poses a threat to price stability in Morocco. Additionally, recurrent droughts and water stress persist as major risk factors for Moroccan agricultural production, impacting both growth and inflation.
From there, Bank Al-Maghrib’s macroeconomic projections expect a slowdown in national economic growth to 2.8% in 2024, after an acceleration to 3.4% in 2023. This drop is mainly due to a contraction of 6 .9% of agricultural added value, affected by a poor cereal harvest estimated at 31.2 million quintals. On the other hand, non-agricultural growth continues to strengthen, with a forecast of improvement to 3.6% in 2024 and 3.9% in 2025. Bank Al-Maghrib anticipates a continued slowdown in inflation in the medium term. After a rapid decline in food prices in 2024, inflation is expected to stabilize at 2.5% in 2025. However, uncertainties linked to disruptions in global supply chains and volatility in commodity prices remain significant. These risks could lead to upward pressure on prices in the short and medium term, in the opinion of the wali.
A widening bank liquidity deficit
Banks’ need for liquidity is expected to increase to 120.4 billion dirhams in 2024, an increase attributable to the expansion of fiat currency. Therefore, the Central Bank plans to increase its liquidity injections in order to meet the growing needs of the banking sector and support the national economy. The wali explains that the Central Bank can refinance up to 400 billion dirhams of liquidity for banks, equivalent to their stock of collateral. There is therefore plenty of room for maneuver, but the cash hemorrhage calls for urgent solutions to better exploit liquidity in the real economy. A study of unprecedented scale is underway by BAM teams to better understand this phenomenon.
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