Business | Economy
Morocco growth could fall below 2.7%
Morocco's economic growth could slow to around 2.7 per cent in the first quarter of 2007 as farm output declines and a weakening global economy cuts demand for its exports, the government said.
- Reuters
- Published: 00:00 January 27, 2007
Rabat: Morocco's economic growth could slow to around 2.7 per cent in the first quarter of 2007 as farm output declines and a weakening global economy cuts demand for its exports, the government said.
"The outlook for growth in 2007 augurs an eventual slowdown under the effect of a below-average agricultural campaign and a relatively less dynamic international environment," the state High Planning Commission (HCP) said.
Still, it said oil prices could drop from records reached last year and this, coupled with income tax cuts, could improve household incomes and support domestic consumption.
The HCP forecast a strong year for the services sector, led by tourism, transport and telecoms and by air transport, which will see new companies entering the sector after a round of liberalisation.
It said the economy grew by an estimated 7.4 per cent in the second half of 2006 but did not give sector-by-sector figures for the period or a number for the fourth quarter.
Unemployment was 10 per cent in the first 11 months of 2006, down 0.9 per centage point from the same period a year earlier, the HCP said.
Improving tourism receipts and transfers of money from Moroccans living abroad boosted foreign reserves which now covered 11.9 months of imports.
The economy grew 6.5 per cent in the third quarter of 2006 due mostly to a rebound in farm incomes, but non-agricultural growth slowed sharply, the HCP said last month.
The government is trying to reduce the economy's dependence on agriculture and nurture traditional industries like tourism and phosphates while pushing into new sectors like IT and back-office outsourcing.
According to the World Bank and International Monetary Fund, Morocco needs annual economic growth of at least 6 per cent a year to make significant inroads into unemployment and attack poverty.
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