Morocco says 2014 GDP growth to slow to 2.5 percent

Morocco expects its gross domestic product growth to slow to 2.5 percent in 2014 from an estimated 5 percent in 2013, the High Planning Commission said on Thursday.

It cited the government’s fiscal policy, the international environment and difficult financing conditions in different sectors as reasons.

“The added value of the primary sector, assuming a medium crop year, would decrease by 3.8 percent against an estimated 14.7 percent rise in 2013” the statement added without elaborating.

Non-agricultural activity would inch up to 3.6 percent from 3.1 percent, the commission said, however it would remain less than an annual average of 4.6 percent recorded between 2010 and 2012.

The commission, which is the official statistics agency, forecasts a decrease to 24.3 percent of GDP from 26.2 percent in 2013 in national savings and a fall in state external revenue to 5.9 percent of GDP from 6.5 percent in 2013.

The country would have to meet the rest of the financing need, or 7.4 percent of GDP, by running down its foreign reserves, external borrowing and foreign direct investments.

The exchange reserves would cover only three months of imports against 3.7 months at the end of 2013, which will continue to weigh on financing conditions, the commission said.

Morocco expects its GDP to grow by 5 percent in 2013 as its agricultural sector is recovering from drought and sees its cereal harvest to reach 9.7 million tonnes, including 5.2 million tonnes of soft wheat, up from 5.1 million in 2012.

Last August, the International Monetary Fund approved a $6.2 billion precautionary line of credit for Morocco, to be treated as “insurance” in case economic conditions worsened further.

However, the IMF urged the country to reform its expensive subsidy and pension systems, which the government has not started because of the political sensitivity of the matter.