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Morocco’s GDP growth is expected to reach 3.5% in 2020 after it stood at 2.7% in 2019, according to a World Bank’ report on 2020 Global Economic Prospects released Wednesday. The international financial institution expects Morocco’s GDP growth to further grow in 2021 and 2022, reaching 3.6 and 3.8% respectively.
The World Bank reveals that the high oil prices have pushed some MENA countries, including Morocco, to «reform price controls and related subsidies on energy between 2010 and 2014».
«The reforms were associated with improvements in the ease of doing business. Within two years of the reform, enterprises in all three countries reported easier access to electricity», the World Bank explained.
However, these reforms, launched in Morocco and many other MENA countries, «differed substantially in their scope, and speed of implementation». «They also varied with respect to compensatory transfers to disadvantaged population groups», the Bank added.
Policy reforms and tourism
In Morocco, reducing the fiscal burden of petroleum subsidies happened while «avoiding severe adverse consequences for poverty and inequality». «In 2013, the government first transitioned to price indexation for petroleum products, and gradually moved to fully liberalize most energy products», the report recalled.
But in August 2014, prices of household utilities increased as part of a multiyear effort to liberalize electricity prices. «The reforms were implemented without triggering social unrest despite the absence of cash transfers to households», the same source said, adding that «the fiscal savings from the reform were instead used to fund other reforms».
But these reforms were not really beneficial for small businesses. According to the World Bank, they are not ready to strengthen their operations and benefit from the integration of the global value chain.
According to the report, «favorable tourism activity continues to support growth in oil importers countries, including Morocco». The World Bank believes that in the coming years, «tourism, aided by government promotion initiatives and improved security, is expected to continue supporting in Morocco».
It also stressed that policy reforms and resilient tourism activity «are expected to support a pickup in growth of Morocco and Tunisia to 3.5% and 2.2%, respectively, in 2020».
Overall, the World Bank has slightly reduced its growth forecasts for 2019 and 2020. Global growth, however, will increase slightly in 2020 thanks to a handful of emerging and developing economies.
