Casablanca – The High Commission for Planning (HCP) in Morocco has released its expectations for the national economy in the fourth quarter of 2024, forecasting a growth rate of 2.5%. This marks a slight decline from the anticipated 2.8% growth in the third quarter.

The HCP’s economic outlook indicates that this projected growth is primarily influenced by a moderation in domestic demand. The commission highlights that the risks associated with this scenario are largely linked to developments in exports, particularly from the extractive and chemical sectors. It is noted that the anticipated increase in these exports may be less significant than previously expected, especially if China resumes its export activities.

Despite these challenges, there are positive indicators. The HCP reports that growing European demand for transportation and electrical equipment is likely to bolster economic growth prospects in the upcoming quarter. However, national exports of goods and services are expected to experience more subdued growth, projected at 7.6% compared to 11.3% in the previous quarter, largely due to a slowdown in manufactured goods sales.

On the imports front, growth is expected to decelerate to 9.2%, down from 14.4% in the preceding quarter. This slowdown in imports is expected to lead to a continued negative contribution from foreign trade to overall economic growth, although its impact may be less pronounced than in previous quarters.

Household consumption is anticipated to remain the primary driver of economic growth, with families expected to continue increasing their consumer spending. This growth will be supported by improved purchasing power, attributed to higher social transfers and wage increases. The HCP also suggests that the household savings rate may see an uptick by the end of 2024, fueled by a rebound in real income growth and improved bank deposits.

Conversely, investment spending is projected to slow significantly due to less favorable international economic conditions. This shift may prompt industrial companies to adopt a more cautious approach to their investment expenditures. Nonetheless, there is an expectation of improvement in public spending, particularly in water and infrastructure projects, which could result in a 5.4% increase in overall investment in the fourth quarter.

Overall, domestic demand is expected to experience a growth slowdown, reaching 4%. The HCP points out that the ongoing global demand slowdown, coupled with supply-related difficulties, will have implications for growth dynamics in the final quarter of 2024.

The commission warns that sectors such as food industries may encounter challenges due to weak local agricultural supply and the associated costs of processing meat, grains, and milk. Consequently, manufacturing industries may see only a modest increase in value added, projected at 2.7% in the fourth quarter.

Agricultural activities are also expected to face ongoing declines in production, with a lesser decrease anticipated in animal production. While some production costs related to fuel, fertilizers, and feed are expected to decrease slightly, the costs of livestock feed and gas are likely to remain elevated. As a result, agricultural value added is projected to contract by 4.4% year-on-year, contributing negatively to overall economic growth by 0.4 points.