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Covid-19EconomyNewsNorth Africa

Morocco’s economy to shrink 1.8% this quarter

Morocco’s economy will contract by 1.8% in the second quarter after growing by 1.1% in the first quarter, the official planning agency said on Wednesday.

Morocco imposed a lockdown from March 20 to reduce the spread of the coronavirus. Meanwhile, poor rainfall has affected agriculture, which makes up 11.7% of the economy.

The agency estimated that the lockdown would cut 3.8 percentage points off growth in April alone, equivalent to 10.9 billion dirhams ($1 billion), after a loss 4.1 billion in March.

Demand for Moroccan exports fell by 3.5% in the first quarter compared with the same period of 2019, and is expected to fall by 6% year-on-year in the second quarter, the planning agency said.

However, demand for fruit and vegetable exports is rising as a labour shortage caused by the coronavirus has hit agricultural production in southern Europe, it added.

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The automotive sector, representing 27% of export sales, has been disrupted by falling demand and the temporary closing of Renault and Peugeot assembly plants, it said.

Phosphates and derivatives exports fell by 40% in value in the first quarter due to lower prices, it said. However, falling energy prices will reduce import costs, partly offsetting the lower value of exports, it said.

Money supply grew in the first three months by 3.6% from 3.7% the previous quarter.