HCP: Growth of 2.9% in Q1, inflation at its lowest in almost three years

In Morocco, for the first quarter of 2024, the High Commission for Planning (HCP) announced economic growth of 2.9%. This growth is mainly attributed to the 4% increase in value added in non-agricultural sectors. Despite a decline in value added in the agricultural sector, the economy continued to improve, thanks to the strength of secondary sectors and the solidity of services. The agricultural sector saw an annual decline of 3.9% in its activities in the first quarter, as opposed to an increase of 6.9% the previous year, a situation due to unfavorable climatic conditions which affected autumn crops and winter. A notable decrease of 42.5% in areas cultivated with cereals compared to the average of the last five years was recorded, with crops mainly in the favorable areas of Saïs, Loukkous and Gharb. High temperatures in mid-January and a rainfall deficit of 46.2% at the end of February had a negative impact on crop development. However, a partial improvement was observed in March, reducing the rainfall deficit to 20.6%, beneficial for certain crops but insufficient to compensate for the losses of early crops. The animal sector also suffered, delaying the revival of red meat production, while white meat production increased slightly by 2.5% thanks to the drop in the price of compound feed, linked to a decrease of 35.5 % of the price of corn.

The secondary sector grew by 6.3%, notably due to a rebound in extractive industries which stimulated other branches, with a notable increase in phosphate production of 28.3% in response to increased demand. Mining added value increased by 11.2%, after a decline the previous year. Manufacturing also grew by 6.8%, with particular improvements in chemicals, transport equipment, rubber and plastics, while the food and textile industry continued to decline.

The construction sector recorded an increase of 3.7%, driven by infrastructure and reconstruction projects. The tertiary branches saw their added value increase by 3.1%, marking a return to moderate growth after a stronger recovery in previous years.

Finally, inflation reached its lowest level in eleven quarters, at 1.1%, thanks in particular to a significant drop in the prices of food products at +1.4% and a slight increase in the prices of non-food products at +0.9%. Core inflation followed a similar trend, but at a slower pace, standing at +2.5%. This drop in inflation is attributed to the decrease in prices of fresh products, the increase in supply on the market, as well as a slowdown in the prices of cereal-based products and edible oils, and to a lower increase in the prices of tobacco and manufactured products.