Moroccan Economy to Improve in 2017

Thanks to a decent performance across all sectors along with improving public finances, the Moroccan economy is poised to strengthen in 2017 according to the last report published by the ministry of economy and finance.

As far as the agricultural sector is concerned, the favorable space-time structure of rainfall is triggering positive signals. Indeed, the average cumulated rainfall stands at 287mm (as of end of February 2017), up by 136% year-over-year but also 7% higher than the average year’s figure, which brought the dams fill rate to 54%. Beyond the positive impact of higher water reserves on agriculture, electrical energy production using hydraulic power should also improve.

Regarding autumn crops, cereals accounted for 87% of seeded acreage which stood at 5.9 million hectares. Henceforth, livestock should also benefit from the expected strong fodder production. With regard to sugar, the acreage under cultivation slid by 3% to 54,500 hectares.

Concerning fisheries, the report provided an overview of the activity in 2016. We read that after stagnating in 2015, coastal and artisanal landings volumes jumped by 7.3% in 2016 driven by higher catches of sardines (+8.6%) and mackerels (+27.7%) which accounted for 66% and 15% of landings respectively. The value of landings increased by 3.9% year-over-year thanks to higher prices of sardines (+6.2%), squids (+208.7%), mackerels (+29.8%), shellfish (+12%), seaweeds (+42.4%) and scabbard fish (+35.8%).

Regarding secondary activities, both the production and the consumption of electrical energy increased by 3.7% and 1.3% year-over-year respectively at the end of January 2017. Also, and in spite of the decline in cement sales by 7% at the end of February, loans to the real-estate sector jumped by 3.8% in January triggering positive signals for the sector. Finally, and as far as the manufacturing industries are concerned, the production capacity utilization rate jumped by 1 percentage point in January signaling favorable prospects.

Services industries growth indicators seem to be following an upward trajectory as well. Indeed, port activity improved in January (+6.4%) and so did air passenger traffic (+8.6%). Moreover, both tourist arrivals and overnights stays jumped by 10.3% and 10.7% respectively in January.

While consumer prices increased mildly by 2.1% in January, household consumption seem to be strengthening. Household consumption should be boosted by consumer credit which has exhibited upward market trends (+5.6% YoY in January 2017), as well as by the favorable agricultural prospects.

At the end of January, public finances were in surplus by MAD 448m thanks to an increase in ordinary receipts by 4.7%, along with higher fiscal revenue by 5.5% YoY. While ordinary expenses mildly increased by 2.4%, investments-related expenses slid by 0.9% to MAD 11.3 billion.

Regarding banks, there was a higher need of liquidity in February 2017. Henceforth, the Moroccan central bank, Bank Al-Maghrib, adjusted the volume of liquidity operations upwards. The Interbank rate was almost stable MoM to 2.26%.

Year-to-date, the stock market indices MASI and MADEX are up by 2.4% and 2.3% respectively after some of the early gains were eroded in February.

Source :Morocco World News