The World Bank has revised its outlook for Morocco’s economic growth, projecting a slowdown in real GDP growth to 2.9% in 2024, down from 3.4% in 2023, according to a report this week.
The global financial institution attributes the deceleration primarily to a decline in agricultural output, underpinned by severe drought conditions that have caused a significant drop in the country’s grain harvest.
In its latest Middle East and North Africa Economic Update, entitled “Growth in the Middle East and North Africa,” the World Bank highlighted the challenges facing Morocco’s agricultural sector, which has historically been a key driver of the country’s economy.
The ongoing drought has eroded the added value of agriculture, a sector that accounts for around 12% of the nation’s GDP.
The report also noted a positive development in inflation rates. After hitting 6.1% in 2023, inflation is expected to decline sharply to 1.5% this year.
The trend has given Morocco’s central bank, Bank Al-Maghrib, the confidence to cut its benchmark interest rate from 3% to 2.75% in June 2024, a move that looks to support economic activity amid softening growth.