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Morocco expects 3.2 % growth by 2023

The European Bank for Reconstruction and Development forecasts that the Alawi country will first experience a slowdown of 1.2% this year, but assumes a recovery after the health crisis
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Good news for the Alawi kingdom. The latest economic forecasts state that the country will have significant economic growth by 2023, according to figures from the European Bank for Reconstruction and Development. Through an official statement, the bank says Morocco will have a growth rate of 3.2%. 

"Morocco could see a 3% rebound in growth in 2023 as agriculture recovers and the pace of growth returns to pre-pandemic levels," the institution confirms.

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The Moroccan economy is experiencing considerable growth despite recent global events. 2021 saw a fairly good recovery from the health crisis despite the whole period of border closures and so on. In that year, Morocco recorded a growth rate of 7.4%. The figure reflects a remarkable restoration of economic activity compared to 2020, where the coronavirus crisis caused the national economy to contract by 6.3%

"The recovery was mainly driven by a record harvest season and gains in manufacturing, trade, construction and business services, amid a period of improved immunisation programmes in the EBRD regions," the institution reports. 

Even so, expectations for this year are less favourable than for 2022. The EBRD reports that, in order to experience such a future boom, Morocco first has to process an economic slowdown of 1.2% during 2022.

The slowdown is mainly due to two drawbacks. The first is the effects of the impact of the Russian-Ukrainian conflict. The invasion of Ukraine is leading to major global havoc in many commodities such as gas, oil and wheat. The two countries at war are the biggest exporters of these materials, so world prices, and also those in Morocco, are rising and citizens cannot afford to buy them. 

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The second is the consequences of the latest drought, one of the harshest in recent times. The climatic conditions have been adverse for the harvest season, as there has been no rain and, as a result, many crops could not be irrigated and many others could not be planted. However, the Kingdom has been very tough with the restrictions imposed to save this year's agricultural production and has been able to save much of it, although it will be smaller than in other seasons.  

The EBRD states that disruptions in the global supply chain and sharp increases in oil and gas prices will continue through 2023. Eventually, and depending on how long the Ukrainian conflict lasts, they will start to fall until they return to normal.

Despite this, the Maghreb country and the financial institution plan to boost financial and technical cooperation. EBRD President Odile Renaud-Basso met with Nadia Fettah, the Moroccan Minister of Economy and Finance, on the occasion of the 31st session of the Annual Meetings of the EBRD Board of Governors, held in Marrakech. During this event, the two sides praised the relations between them and planned to continue to cooperate as partners on various issues of common interest.

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Beata Javorcik, EBRD chief economist, predicts serious financial consequences for North African countries.

In contrast to Morocco's growth, the institution's chief economist expects North African nations to suffer the consequences of the war more severely, even more so than Russia itself.

"North Africa is like an innocent bystander, a region hugely affected by high agricultural commodity prices. Its governments face a very unattractive choice: continue to apply food subsidies to avoid social unrest, at the cost of straining national budgets and external sustainability," Javorcik told EFE. 

The economist says that as food and energy prices rise, the currencies of these countries are becoming weaker and weaker. It is like in the global crisis of 2008, where all these nations saw their economies in a trade crisis and their external debt would grow enormously.