Despite unfavorable whether conditions this year, “the recovery of the manufacturing and tourism sectors, supported by a recovery in exports and domestic demand”, should support the Moroccan economy, said the EBRD in its report on the regional economic outlook. .
Inflation in Morocco continued to decline, reaching 1.3% in July 2024, thanks to the fall in food and energy prices, observed the EBRD, welcoming the “gradual fiscal consolidation trajectory” of the government, which made it possible to “reduce the deficit to 4.3% of GDP”.
The deficit contracted thanks to lower imports and better performance in tourism, remittances and exports of automobiles and electrical equipment, the London-based institution noted.
Across the southern and eastern Mediterranean region, growth is expected to be 2.1% for the first half of 2024. A figure slightly lower than the 2.7% recorded during the same period. period last year.However, growth is expected to accelerate to reach 2.8% in 2024, less than the forecasts made last May (3.4%).
This downward revision is explained by a slower than expected recovery in private and public investment following disruptions in the energy sector, severe droughts and the impact of the war in the Middle East on economies in the region, detailed the Bank.
The EBRD regional economic Outlook is published at least twice a year. The report contains a summary of regional economic developments, as well as the Bank’s growth forecasts for the economies in which it invests.
How does the decline in inflation impact consumer behavior and overall economic growth in Morocco?
Interview with Dr. Amina Saïd,economic expert on Moroccan and Regional Economic Outlook
Time.news editor: thank you for joining us today, dr. Saïd. The recent EBRD report highlighted a recovery in Morocco’s manufacturing and tourism sectors. Can you explain what factors contributed to this recovery despite the unfavorable weather conditions?
Dr. Amina Saïd: Thank you for having me. The recovery in Morocco’s manufacturing and tourism sectors can be attributed to a combination of improved exports and a rise in domestic demand. Although weather conditions have been unfavorable, which typically affects agriculture, sectors like tourism have seen increased activity due to rising international visitor numbers and better marketing strategies. Manufacturing, especially in automobiles and electrical equipment, has also benefited from a more favorable trade environment.
Time.news Editor: Interesting insights. The report mentioned a decline in inflation to 1.3% in July 2024, driven by decreasing food and energy prices.How significant is this decline for the Moroccan economy?
Dr.Amina Saïd: A drop in inflation is highly significant; it enhances purchasing power and consumer confidence.The reduction to 1.3% indicates that the government’s fiscal policies are working effectively. Lower food and energy prices alleviate pressure on households,allowing for increased spending in other sectors. This, coupled with a gradual fiscal consolidation that reduced the deficit to 4.3% of GDP,lays a stable foundation for future economic growth.
Time.news Editor: The EBRD also noted a contraction in the budget deficit due to lower imports and improved performance in tourism. Can you elaborate on these factors?
Dr. Amina Saïd: Certainly! Lower imports mean that Morocco is becoming more self-reliant and can keep more foreign exchange within the country, which is crucial for economic stability. Improved tourism performance generates significant revenue, which boosts local businesses and creates jobs. Moreover, strong remittances and exports of key sectors like automobiles and electrical equipment are vital, enhancing the overall economic resilience.
Time.news Editor: The regional growth forecast is 2.1% for the first half of 2024,slightly lower than 2.7% from the previous year. What are the implications of this downward revision for the region?
Dr. Amina Saïd: The downward revision reflects underlying challenges,such as slower recovery in both private and public investments and ongoing disruptions in the energy sector. this indicates cautious sentiment among investors and underscores the need for structural reforms. Countries in the region will need to focus on diversifying their economies and improving infrastructure to stimulate growth. The anticipated acceleration to 2.8% in 2024 is positive, but we need sustained efforts to reach or exceed previous growth levels.
Time.news Editor: Given the challenges like severe droughts and the Middle Eastern conflict, what practical advice would you offer to investors looking at Morocco and the broader region?
Dr. Amina Saïd: Investors should adopt a strategic approach.They should consider sectors that are less prone to economic fluctuations, like technology and renewable energy, which could still offer good returns despite external pressures. Additionally, forming partnerships with local businesses could mitigate risks associated with market entry.Staying informed about regional developments is critical; this will allow investors to adapt their strategies proactively.
Time.news Editor: Thank you, Dr. Saïd, for sharing your valuable insights on Morocco’s economic landscape and the broader Mediterranean region. Your analysis provides a clearer picture for investors and stakeholders.
Dr. Amina Saïd: It’s my pleasure! Understanding these dynamics is essential for making informed decisions in today’s fluctuating economy. Thank you for the engaging conversation.
Keywords: Moroccan economy, EBRD report, inflation decline, manufacturing recovery, tourism sector growth, economic forecast, regional economic outlook, investment strategies, financial stability.