Morocco closed the year 2022 with a clear idea of the pillars on which its economy should be based in order to continue recovering lost ground. The energy crisis due to supply shortages, aggravated by the diplomatic rift with its Algerian neighbour, was not the best indicator to start the new year. However, Rabat pointed forcefully to investment and exports, especially agricultural exports. The latter are one of the most important aspects of the Moroccan economy and will continue to be so, at least in the first quarter of 2023.
In this first period of the year alone, the recovery of the Kingdom's economy is expected to reach 3.4% compared to the last quarter of last year, according to projections by the High Planning Commission (HPC). A figure that takes on even more importance if one takes into account that in this same stretch of 2022 growth did not exceed 0.3%. One of the factors driving this rise is the recovery of 6.7% in agricultural value added, which will also take place in a context of a favourable climate for production.
Although agriculture is one of the most important sectors, non-agricultural activities should also experience growth of 3%, according to the HPC. In addition to this, a significant increase in consumer spending by the population is expected. Up to 4.5%, more than four times higher than in the first quarter of last year, when it did not exceed 1.1%. However, the increase in the purchasing power of the Alawi population, especially in rural regions, is still not very high, although this figure is expected to gradually improve over the course of the year.
To achieve these objectives, Morocco has been preparing the ground throughout the past year, and expects to reap much of the rewards in 2023. The activation of the Mohammed VI Fund for Foreign Investment is one of the most important of these, as is the growth in investment in the industrial sector, as highlighted by the Minister of Industry and Trade, Riyad Mazour. But not only in this sector, as one of the objectives is to increase investment at all levels, with a specific focus on the private sector.
Currently, private investment in the Alawi kingdom represents one-third of the total, and the expectation for this year is that it will increase to represent two-thirds of the total investment volume. The current uncertainty due to the climate of regional tension does not help to encourage investment, and Rabat will offer a series of financial and fiscal incentives to boost it. All this is in line with achieving the annual economic growth target of 4% by the end of the year, also taking into consideration that the Kingdom has closed 2022 with a growth rate of 1.5%.