Morocco records economic growth of 3.5% and an increase in bank deposits
Morocco's central bank, Bank Al-Maghrib, has published a report, entitled "Monthly review of economic, monetary and financial conditions", detailing the balance of the economic situation during the last month.
The report states that following the COVID-19 pandemic-related crisis, the Moroccan economy is beginning to show signs of recovery, due to an improvement in agricultural production and strong activity in the tertiary sector, particularly in hotels and restaurants, and services. Economic growth in the first quarter of 2023 was 3.5% compared to 0.5% in the previous year.
At the end of May 2023, deposits in Moroccan banks reached MAD 1.118 trillion, registering an increase of 5.3% compared to the previous year. Households contributed MAD 837.8 billion in deposits, representing an increase of 5.9% compared to the previous year. On the other hand, private corporate deposits also saw a significant increase of 7.6% to Dh183.9 billion (equivalent to $18 billion).
In addition, thanks to increased international demand and the affordability of Moroccan products, exports have increased significantly in industries such as automotive and textiles. Increases of 39.9% in exports in the automotive industry and 15.9% in exports in the "textile and leather" industry were the main contributors to the improvement in exports.
As for inflation, the consumer price index (CPI) showed a monthly fall of 0.4% in May 2023, which was mainly due to a 2.7% drop in prices. This was the first monthly fall of 0.4 per cent in the CPI since June 2021. Fuel prices also fell by 2.9%.
However, the Moroccan economy continues to face a challenging labour market. 280,000 jobs were lost between the first quarter of 2022 and the same period of 2023, compared to 58,000 in the previous year. With the exception of construction, which saw the creation of 28,000 jobs, the other sectors recorded declines of 247,000 jobs in agriculture and 56,000 in services. In industry, including crafts, the decline was 10,000 jobs with a loss of 38,000 in crafts and a creation of 28,000 in industries. The recent attraction of foreign companies and investment in the automotive sector is expected to offset these job losses.
In terms of the information it provides on credit in the North African kingdom, bank lending reached an annual growth of 6.5%. Credit allocated to financial agents increased by 16% while non-financial agents saw an increase of 5.1%.
Finally, Bank Al-Maghrib highlights in its report the favourable outlook for the Moroccan economy in the short and medium term, provided that macroeconomic stability is maintained and the implementation of structural reforms necessary to improve competitiveness, productivity and employment in the country is accelerated.