Morocco’s 2024 Economic Growth Forecast Trimmed by Fitch Solutions Due to Agricultural Downturn
Fitch Solutions has lowered its 2024 GDP growth forecast for Morocco to 5.0%, down from a previous projection of 5.6%. This adjustment, highlighted in their recent report, “Moroccan Economy Set to Accelerate in 2025, Despite Headwinds from Struggling Agricultural Sector,” attributes the slowdown to a downturn in agricultural production.
While the agricultural sector faces challenges, Fitch Solutions remains optimistic about Morocco’s overall economic outlook. They predict a rebound in 2025, anticipating accelerated growth. This positive projection likely stems from Morocco’s diversified economy, which includes tourism, manufacturing, and renewable energy, lessening the long-term impact of agricultural fluctuations. For example, the Moroccan government has been actively promoting its renewable energy sector, aiming to generate 52% of its electricity from renewable sources by 2030. This commitment to sustainable energy could attract foreign investment and boost economic activity. Furthermore, the tourism sector, a significant contributor to Morocco’s GDP, is expected to continue its recovery following the global pandemic.
The agricultural sector’s vulnerability to climate change is a key factor in the revised forecast. Morocco, like many countries in North Africa, is experiencing increasingly erratic rainfall patterns and prolonged periods of drought. These conditions significantly impact agricultural output, particularly crops reliant on rain-fed agriculture. The World Bank estimates that climate change could reduce Morocco’s GDP by up to 14% by 2040, underscoring the urgency of addressing these environmental challenges. Investing in drought-resistant crops and modernizing irrigation systems are crucial steps towards mitigating the impact of climate change on the agricultural sector.
The decline in agricultural production has a ripple effect throughout the Moroccan economy. Agriculture employs a significant portion of the population, particularly in rural areas. A downturn in this sector can lead to job losses and reduced income, impacting domestic consumption and overall economic growth. Furthermore, agriculture contributes significantly to Morocco’s export earnings. A decrease in agricultural exports can widen the trade deficit and put pressure on the Moroccan dirham.
Despite the near-term challenges, Morocco’s long-term economic prospects remain positive. The country has implemented various structural reforms aimed at improving its business environment and attracting foreign investment. These reforms
