Morocco Economic Outlook
After growing 1.3% year on year in January–September, the economy expanded 1.4% in Q4, according to a preliminary estimate by the statistical office. This implies that the economy grew 1.3% in 2022 as a whole, which would be the worst performance in MENA bar Lebanon, according to our latest forecasts. Heading into the new year, the statistical office projects growth of 3.4% in Q1 2023, as rains in December should aid agricultural output. In other news, the Financial Action Task Force, an intergovernmental financial crime watchdog, removed Morocco from its “grey list” in February. This should help Morocco regain its sovereign debt investment grade rating, which it lost two years ago. In related news, Morocco returned to the international debt market in March for the first time since it lost its investment grade rating, with a USD 2.5 billion issuance in two tranches.
Inflation rose to 8.9% in January from 8.3% in December. January’s print was the highest since the series began in 2008. Inflation should cool significantly this year as commodity prices decline and the Central Bank’s rate hikes kick in. Key factors to watch include weather conditions, the Russia-Ukraine grain deal and energy prices.