Wednesday, January 21, 2015

Moroccan Economy ~ Mixed Messages for the Year Ahead

Morocco will experience strong economic growth in 2015 based on expectation of a bountiful harvest and the drop in oil prices, authorities said on Tuesday

Ahmed Lahlimi Alami, the high planning commissioner, told journalists that growth was expected to be 4.8 percent in 2015, a dramatic increase over 2.6 percent the previous year, which was marked by a poor harvest. "2015 will be a good year because we are counting on predictions of a good agricultural year," Alami said. "We will also profit from the fall in the price for oil."

However, other reports suggest that the weather will play a part in lowering expectations of some agricultural products, particularly citrus and industry insiders say adverse weather toward the end of 2014 led the Moroccan citrus industry to substantially revise its production estimate for the season.

The Moroccan Citrus Producers’ Association (ASPAM) now believed total volumes would not exceed 500,000 metric tons (MT), down from the initial forecast of 600,000MT.

Heavy rainfall and strong winds in November last year are said to have caused extensive crop damage, particularly in the southern region of Souss where more than half of the country’s export volumes are produced.

Although the weather took its toll on citrus production, the rainfall did provide some relief to drought conditions in the country.

With a current estimated production of some 1.9 million MT, it is now believed no more than 30% will be fit for export.

Energy Subsidies

Unlike neighbouring Algeria whose economy depends almost entirely on oil, Morocco imports nearly all of its energy and has experienced a windfall from the dramatic fall in prices.

Morocco's Islamist-led government has pursued austerity programs since coming to power in 2012, freezing government hiring, cutting sensitive fuel subsidies and spending.

According to Alami, the amount spent on subsidies fell from nearly $6 billion in 2012 to $3.5 billion in 2014.

Faced with the pro-democracy Arab Spring demonstrations in 2011, Morocco's previous government incurred a great deal of debt by dramatically raising salaries and increased government spending in 2011.


On the tourism front, things are looking good for Morocco. The country experienced a good result over the Christmas and New Year period and although tourist numbers are low at the moment they are expected to rise again by the end of January.

Dspite the decline in the number of French tourists, Marrakech achieved a 6% growth both in arrivals as nights, especially with strong growth of the British and German markets.

As an example of the trends, tourism in Marrakesh managed to stay on course for growth in 2014. Tourism in the Red City performed well with 1.89 million arrivals and growth of 6% for overnight stays and indicators arrivals.

According to statistics obtained from the Regional Tourism Council (CRT) of Marrakech, in late December 2014 and all markets, the city recorded a cumulative 1.89 million arrivals (+ 6%) and 6088 000 overnight stays (+ 6%) with an occupancy rate reaching 53%.

French market decline

In terms of growth, the English and the Germans are leading the pack with growth rates between 30 and 40%. The French market has experienced significant declines - 6% for arrivals and - 5% for overnight stays in 2014.

This performance, exceeding the global growth rate of 4.5% forecast by the World Tourism Organisation for the year 2014 and that recorded nationally, are explained by several factors, including the growth in airline flights. Marrakech has improved by 33 additional air services to and from European markets, bringing the offer to 280 rotations week performed by thirty companies. With the launch of new lines, particularly from Italy, the United Kingdom, Germany and Austria, Marrakech Menara Airport has achieved a 4 million passenger record, up 5% in one year.

The steady growth of the tourism sector in Marrakech in recent years is also due to the development of the activity related to business tourism, conferences and events. With three convention centres, Marrakesh confirms its leadership in the national and continental congress tourism.

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