Morocco begins to take steps to foster economic recovery

Expectations for Morocco's economic recovery in the post-covid era are positive, especially in the primary and secondary sectors
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Morocco continues to respond favourably to the vaccination campaign launched by Morocco's King Mohamed VI. So much so that the situation has attracted the attention of several experts who have already expressed their hopes that the eradication of the pandemic is getting closer and closer and that this will boost the Kingdom's economic development.

In this sense, they estimate that the Gross Domestic Product will increase by 9% this year and by 3.8 to 4% in 2022-2023. 

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Since the pandemic began, Morocco has recorded a total of 905,000 cases and 13,500 deaths. In this regard, to tackle these figures, the Moroccan government has implemented harsher measures compared to other countries in the Middle East and North Africa to curb the spread of the virus. In this context, 50% of the population has received at least one dose of Sinopharma or AstraZeneca. This percentage of the population puts Morocco at the top of the list of vaccinated people compared to most African countries. Morocco has also reportedly started vaccinating children between 12 and 17 years of age, reflecting rapid progress in the vaccination plan.

As with most countries, Morocco's tourism sector has been affected as a direct consequence of the pandemic. Prior to the pandemic, tourism generated almost 11% of GDP and employed half a million people. As reported by the International Monetary Fund in August 2020, Morocco experienced that the country's tourism sector was the most affected worldwide. In this respect, economic losses were estimated at 7.2 billion dollars. 

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Even so, the situation has managed to improve this year following the reduction of air fares for Moroccan citizens residing abroad or the reduction of other transport fares, including car rental prices.

Although even hotel rates have fallen by up to 30%, mobility restrictions in the EU and the UK remain an obstacle to the arrival of tourists in Morocco.

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On the other hand, the agricultural sector, one of the major casualties of the severe drought that hit the country in 2020, a report by Capital Economics noted that, "while Morocco has taken steps in recent years to transform agriculture to crops more suited to its climate, wheat remains the largest crop. Cereal production fell 36 per cent last year to its lowest level since 2007. Weather conditions have improved, and the High Commission for Planning Projects will increase agricultural value added by 19.1 per cent this year".

As for the automotive industry, the sector has been supported by government strategies that would have included economic incentives, a focus on local training and personal development, which would have boosted the market for electric vehicles. Moreover, thanks to Morocco's geographical proximity to Europe, the Alawi kingdom can deliver cars in short lead times (to Spain in one day and to the rest of Europe in two), so Morocco aims to create 160,000 jobs and export one million cars a year.

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On the other hand, fiscal policy continues to suffer, which means that it is limited in its ability to address the budget deficit. Even so, the government is fulfilling its commitment to broaden the tax base, in addition to trying to eradicate tax evasion. According to an Oxfam report published in 2019 entitled "Equal Morocco, fair tax collection", the government loses $2.5 billion in taxes annually as a result of tax evasion by multinational companies.