The World Bank expects Morocco’s GDP to contract by -4% in 2020 due to the health crisis

The World Bank expects Morocco’s GDP to fall by -4% in 2020 due to the coronavirus health crisis. In a report released Monday, the international financial institution indicates that the Kingdom’s GDP is to improve during the following year, 2021, by 3.4%.

The report, entitled Global Economic Prospects, shows that the percentage point differences from January 2020 projections is at -7.5% and -0.2% in 2021. According to data compiled by the World Bank, Morocco is not the only country to suffer from the current health crisis.

Indeed, the World Bank’s Middle East and North Africa economy forecasts show that most countries in the region will suffer a -4% drop in their GDP because of the Covid-19 pandemic. «The pandemic and associated mitigation measures have sharply curbed consumption and investment, as well as restricted labor supply and production», wrote the World Bank.

«The cross-border spillovers have disrupted financial and commodity markets, global trade, supply chains, travel, and tourism», it stressed.

Better forecasts for 2021

Indeed, in 2020, the GDP of Oman and Tunisia is expected to fall by -4%, while that of the United Arab Emirates and Bahrain is to drop by -4.5%. Algeria (-6.4%), Lebanon (-10.9%), Palestine (-7.6%) and Iraq (-9.4%) will be among the countries hit hard by the health crisis.

However, the World Bank reports that «regional growth is expected to resume in 2021 as the impact of the pandemic subsides and investment improves», adding that «fiscal and monetary policy support in response to the pandemic has been swift in large regional economies».

To calculate the damage of the virus on Morocco’s economy the United Nations Development Program (UNDP), the United Nations Economic Commission for Africa (UNECA) said in April that some sectors in Morocco have showed early signs of vulnerability, including tourism, transportation and logistics.

The report’s forecasts showed that Morocco’s economy is expected to suffer from the negative impacts of the pandemic. «A baseline scenario shows that real GDP would recede by 1.5 percent in 2020, the first recession hitting Morocco since more than two decades ago», it reported.

Worldwide, the WB estimates that the global GDP should decrease by -5.2% in 2020, the worst global recession in several years marked by growth.