The High Commission for Planning (HCP) has published its outlook for the second quarter of 2023 as well as the outlook for the third quarter. It shows that the growth prospects for Q2 and Q3 2023 are oriented towards a strengthening of the slowdown in the world economy, a more accentuated moderation of foreign demand addressed to Morocco and a gradual reduction in inflationary pressures.
Overall, economic activity is expected to grow by 3.4% in the third quarter of 2023, year-on-year, instead of rising by 1.9% during the same period of the previous year.
Thus, the HCP note underlines that the national economy would have continued its recovery in the second quarter of 2023, after having progressed by 3.5% in the first quarter, noting that it would have been driven by a joint improvement in the agricultural value added of 6.3% and that of non-agricultural activities by 3%.
In Q3 2023, economic growth should pick up slightly with an improvement in the determinants of household consumption and an attenuation of the decline in investment.
In addition, global economic growth would have continued to slow in the second quarter of 2023, due to the current context marked by the decline in manufacturing production and the continued tightening of monetary and financial conditions, underlines the HCP in its note on the situation.
Regarding international trade in goods, the HCP specifies in its note that it would have remained generally sluggish in the second quarter of 2023, reflecting weak growth in imports from advanced countries. However, we note that the world demand addressed to Morocco would have been relatively resilient, posting an increase of 2.5%, in annual variation, driven by services, while that for goods would have been particularly soft during the same period. .
As for the world prices of raw materials, they would have returned, since the beginning of the year 2023, according to the HCP, to levels well below those recorded in mid-2022, with however greater volatility.
” The price of Brent would have reached $79.9/barrel during the months of April-May 2023, instead of $112.7/barrel a year earlier, down 26.7% year-on-year, and that natural gas in Europe would have been divided by 3 to reach approximately $11.8/mmbtu. The prices of agricultural products, for their part, would have fallen by 11.3%, in particular those of grains and oils, but those of sugar would have posted an increase of 26.7%, in annual variation.explains the HCP in its note on the situation.
And to specify that “Under these conditions, headline inflation would have continued to ebb at the global level, while its underlying component would have remained at high levels, fueled by a sustained rise in the prices of services. Overall, the increase in consumer prices would have stood at +4.4% in the United States, +6.5% in the euro zone and +0.1% in China in the second quarter of 2023“.
For the export of goods and services. According to the HCP, and in the second quarter of 2023, the volume, up 7.1%, would have been driven particularly by accommodation and catering services and by automobile sales, while that of imports was not would have grown by only 2.2% in annual variation, benefiting from the decline in purchases of semi-finished products and raw products.
According to the situation report for the second quarter of 2023 from the High Commission for Planning (HCP) and the outlook for the third quarter of the same year, agricultural value added should increase by 6.8%. This increase is mainly due to the continued recovery of crop production. At the same time, the decline in livestock production is expected to ease with the implementation of measures to combat the effects of drought and ensure an adequate supply of barley for livestock farmers.
The HCP also estimates that resilient demand will support a 3.3% increase in the value added of non-agricultural activities in the third quarter of 2023, compared to the same period of the previous year.
The growth of non-agricultural activities, mainly driven by accommodation and food services since mid-2021, should gradually rebalance in favor of other sectors of activity, according to the same source.
Manufacturing production is expected to grow by 1.6%, mainly due to better-oriented demand for construction-related industries and continued consolidation in transport equipment manufacturing branches.
The contraction in construction sector activities is expected to ease, with an acceleration in the production of social housing, while services are expected to register growth of 4.5%.
Regarding inflation, the HCP forecasts a decline to 5.4% in the third quarter of 2023 at the national level, and the underlying component of inflation could decrease to 4.8%. This development is explained by a less marked increase in food and manufacturing prices, and the absence of major tensions on the world market for raw materials.
In this context, domestic demand should continue to improve, thus contributing 1.5 points to overall economic growth. Household consumption should increase by 1.9%, while corporate investment will be slow to recover due to weak growth in corporate margins.
With regard to global demand addressed to Morocco, its growth should moderate significantly in the third quarter of 2023, with an expected increase of 2% compared to the same period of the previous year, against +7.7% previously.
As a result, the contribution of net foreign demand to national economic growth would remain positive, but would decrease to +1.9 points, compared to +3.1 points for the same period of the previous year, according to HCP estimates. .