Domestic demand in Morocco surged in the second quarter of 2024, a 5% increase compared to the modest 0.1% rise during the same period last year, according to a new report from the Higher Commission of Planning (HCP).
The sharp rebound added 5.2 percentage points to Morocco’s overall economic growth, a significant improvement from the near-stagnant 0.01-point increase in the second quarter of 2023.
Domestic demand is a central indicator of economic health that encompasses household, investor, and government expenditures, according to the report. The boost in consumer spending played a major role in Morocco’s economic turnaround. Household final consumption expenditures increased by 3.1%, up from 0.6% a year earlier, contributing 1.7 percentage points to GDP growth, compared to just 0.4 points last year.
The uptick reflects a resurgence in consumer confidence as inflationary pressures ease and labor markets remain robust.
Meanwhile, government spending slowed. Public sector final consumption grew by only 3.8%, down from a 4.9% increase in the second quarter of 2023, contributing a mere 0.7 percentage points to GDP growth, as Morocco’s national government continues to shift focus from pandemic-era relief spending toward more targeted fiscal policies.
Investment also provided a strong tailwind for the economy. Gross fixed capital formation (GFCF), which includes business investments, inventory changes, and the net acquisition of valuable assets, soared 8.9%.
Investment reversed significantly from the 4.2% contraction in the second quarter of last year. The investment boost contributed 2.7 percentage points to economic growth, a sharp swing from the negative 1.4-point drag seen a year earlier.