Morocco’s growth to slow to 2.6 pct in 2016

Morocco’s economic growth is expected to slow to 2.6 percent in 2016 from an estimated 4.3 percent this year, its planning agency said on Tuesday, as agricutural output falls from an exceptional 2015.

Agriculture accounts for more than 15 percent of the economy and the government forecasts gross domestic product (GDP) will grow 5 percent after this year’s cereal harvest hit a record 11 million tonnes.

Non-agricultural activity will increase by 3.1 percent in 2016, after 2.5 percent growth in 2015, the HCP agency, the official statistics office, said.

It expects investment by the state and public companies to decrease to 28.9 percent of GDP from 29.6 percent in 2015.

Foreign exchange reserves would cover 6.1 months of imports at the end of 2016 against 5.9 months at the end of 2015, the agency said, forecasting an increase of 15 percent of foreign direct investments.

It sees the current account gap narrowing to 3 percent of GDP next year from 3.3 percent in 2015.

State debt is estimated to be 64.9 percent of GDP in 2016 against 63.8 percent at the end of 2015. Global public debt would reach 81.2 percent of GDP, up from an estimated 79.6 percent in 2015, the Agency added.

The Moroccan government set out to improve public finances in 2013, when it started to cut subsidies and freeze hiring in public sectors. It is expected to launch a painful reform of pension systems in the coming months.