2014-02-19 08:24:03 - Morocco Business Forecast Report Q3 2013 - a new country guide report on companiesandmarkets.com
Despite not possessing hydrocarbon wealth, the Moroccan economy will remain a relative outperformer in North Africa over the medium term. Though we expect 2013 to be another challenging year as exposure to the European recession takes its toll, investor interest in the country as an export-oriented manufacturing hub for the European market, coupled with a burgeoning tourism industry, bodes well for Morocco´s underlying growth momentum.
We expect Morocco´s 2013 economic recovery to be underpinned by an ongoing rebound in the agricultural sector and an improvement in net exports. We forecast real GDP growth of 4.3% this year (revised upward from 3.5% previously), from 2.4% in 2012. That said, domestic demand and non-agricultural growth will remain below potential owing to prolonged weaknesses
in Morocco´s external environment, as well as the government´s intention to limit public investment over the year.
Morocco´s public finances will remain under considerable strain over the year, and we maintain our long-held view that the government´s aim to narrow the fiscal deficit to 4.8% of GDP is overly optimistic.
We forecast a deficit of MAD50.8bn (EUR4.6bn), equivalent to 5.7% of GDP in 2013. Subsidy reform is likely to be delayed until 2014 at the earliest, while the government´s plans to trim down investment spending this year will harm medium-term economic growth.
While 2013 will be another difficult year for Morocco´s balance of payments position, imports are likely to gradually decrease throughout the year given lethargic domestic consumption and the winding down of the country´s food import programme. We project the current account deficit to reach 6.7% of GDP in 2013, a modest recovery from 9.9% of GDP in 2012.
Key Risks To Outlook
Our forecasts for economic activity and fiscal policy assume that Morocco will benefit from significant inflows of foreign aid from the Gulf Cooperation Council and other organisations in 2013. Should this assistance fail to materialise, it would pose serious downside risks to the country´s outlook.
The export sector remains highly vulnerable to any escalation of the ongoing eurozone sovereign debt crisis, and a sharper-thananticipated recession in the eurozone would force us to make significant downward revisions to our growth forecast.The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.
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