HCP Predicts 4.6% Fall in Economic Activity in Q3
Casablanca - Economic activity should record in the third quarter of 2020 a decrease of 4.6%, in annual variation, instead of an increase of 2.4% in the same period of the past year, according to the High Commission for Planning (HCP). This decline would be due to a decrease in value added activities outside agriculture by 4.1% and that of agricultural activities by 5.9%, said the HCP in its recent note. "Under the effect of a gradual lockdown lifting, a reopening of borders and a resumption of transport and trade activities, growth and world trade should recover slightly in the third quarter of 2020, although still below their pre-crisis trend. In this context, foreign demand to Morocco would improve by 3% compared to the second quarter of 2020, but its decline, in annual variation, would be at -15.6%", noted the same source.
Inflationary pressures should remain contained, and would be dependent on the development of international prices for energy and food products said HCP, noting that domestic demand would recover, for its part, moderately and slowly, while the fall in household consumption would decrease to reach -4.6%, following a recovery in spending, particularly in manufactured goods. Regarding public consumption, it would continue its upward trend at the rate of 6%, in annual variation, driven by the dynamics of particularly social spending, while investment would remain generally sluggish and its recovery would take time to materialize in Q3- 2020. In the secondary sector, the decline in activity would reach –5.8%.
The contraction in industrial value added should ease with the recovery of industries meant for the local market, but the prospects of a weak recovery in foreign demand would continue to weigh on export-oriented industries, notably the Metallurgical, Mechanical and Electromechanical Industries. Similarly, the consumption of electrical energy would also recover, in the wake of the gradual recovery of industrial activities and rail transportation. In mining, the drop in world agricultural consumption should curb the dynamics of international demand for fertilizers, in a context of weak global economic performance. The production of non-metallic ores would adjust to less vigorous external demand, causing in its wake a slowdown in the growth of mineral value added to +0.1%, in the 3rd quarter of 2020. Concerning the activity of the tertiary sector, it would be driven by the dynamics of the communication and non-market services sectors, and to a lesser extent by the recovery of trade and transport activities.
Overall, the value added of the tertiary sector would decrease by 1.6%, in annual variation, instead of an increase of 3.8% during the same period of the previous year. In addition, the HCP said that the decrease in the value added of agricultural activities should not, however, be accompanied by an increase in food inflation. Local agricultural supply, although declining compared to the same period last year, will remain in excess compared to the demand, particularly for market gardening, fruit crops and animal production.
Inflationary pressures should remain contained, and would be dependent on the development of international prices for energy and food products said HCP, noting that domestic demand would recover, for its part, moderately and slowly, while the fall in household consumption would decrease to reach -4.6%, following a recovery in spending, particularly in manufactured goods. Regarding public consumption, it would continue its upward trend at the rate of 6%, in annual variation, driven by the dynamics of particularly social spending, while investment would remain generally sluggish and its recovery would take time to materialize in Q3- 2020. In the secondary sector, the decline in activity would reach –5.8%.
The contraction in industrial value added should ease with the recovery of industries meant for the local market, but the prospects of a weak recovery in foreign demand would continue to weigh on export-oriented industries, notably the Metallurgical, Mechanical and Electromechanical Industries. Similarly, the consumption of electrical energy would also recover, in the wake of the gradual recovery of industrial activities and rail transportation. In mining, the drop in world agricultural consumption should curb the dynamics of international demand for fertilizers, in a context of weak global economic performance. The production of non-metallic ores would adjust to less vigorous external demand, causing in its wake a slowdown in the growth of mineral value added to +0.1%, in the 3rd quarter of 2020. Concerning the activity of the tertiary sector, it would be driven by the dynamics of the communication and non-market services sectors, and to a lesser extent by the recovery of trade and transport activities.
Overall, the value added of the tertiary sector would decrease by 1.6%, in annual variation, instead of an increase of 3.8% during the same period of the previous year. In addition, the HCP said that the decrease in the value added of agricultural activities should not, however, be accompanied by an increase in food inflation. Local agricultural supply, although declining compared to the same period last year, will remain in excess compared to the demand, particularly for market gardening, fruit crops and animal production.
Source : https://www.marocafrik.com/english/HCP-Predicts-4-...