Moroccan Economy: Inflation Controlled at 0.7% and Sectoral Growth in Q2 2024

In the second quarter of 2024, the Moroccan economy showed signs of strengthened dynamism, with GDP growth of 2.9% year-on-year, compared to 2.5% in the previous quarter.

Sectors in Growth

This acceleration was largely driven by robust domestic demand, boosted by favorable calendar effects on consumer spending. The manufacturing and accommodation services sectors are expected to continue to support this positive trend, forecasting economic growth of 3.2% for the third quarter of 2024.

The extractive industries recorded an impressive growth of 15.6%, driven by an increase in non-metallic mineral exports and renewed local demand for processed products. At the same time, the construction sector continued its momentum with a growth of 3%, fueled by dynamic public works and a significant increase in cement sales.

Manufacturing Sectors

After a mixed start to the year, the manufacturing industries rebounded in the second quarter of 2024 with a value-added growth of 3.5%, compared to 2.1% in the previous quarter. Chemistry and construction-related industries were the main drivers of this recovery, while exports of metallurgy and electronic products also stimulated the sector's renewed vigor.

Tertiary Sectors

The tertiary sectors benefited from a significant recovery in domestic demand. Wholesale trade recorded a notable improvement in sales, while business services grew by 3.9%, following the industrial recovery. Similarly, the transport and accommodation sector saw its vigor increase, supported by national and foreign religious festivals such as Easter and Eid al-Fitr.

Agricultural Sector

In contrast, the agricultural sector contracted by 4.9% due to the severe drought that affected major crops such as wheat and barley, thus reducing overall production despite increased resilience in poultry farming.

Inflation and Consumption

Domestic demand was a crucial driver of economic growth, contributing positively with 3.9 points, compared to a null contribution in the same period last year. Household consumption continued to grow, driven by a partial improvement in purchasing power and an increase in public transfers. Although inflation fell to 0.7% in the second quarter of 2024 compared to 6.8% the previous year, households had to dip into their savings to cope with increased spending during the Eid al-Fitr and Eid al-Adha holidays.

Foreign Trade

Despite an improvement in exports of goods such as automotive, phosphates, and aeronautics, the net contribution of foreign trade to economic growth remained negative in the second quarter of 2024. Imports increased by 11.8%, exceeding the 10.9% increase in exports, thus widening the trade deficit.

Economic Outlook

The economic outlook for the third quarter of 2024 remains optimistic, supported by a continued improvement in the global economy and a robust recovery in advanced and emerging economies. A projected growth of 3.2% should consolidate the growth momentum observed in the manufacturing and services sectors, while mitigating some persistent challenges such as agricultural volatility and pressures on foreign trade.

Finally, the Moroccan economy shows encouraging signs of recovery and resilience, despite persistent challenges. With an accommodative monetary policy and sustained growth prospects, Morocco is well positioned to navigate through global economic turbulence and capitalize on its domestic strengths.