Morocco growth forecast might fall short

Morocco is considering trimming economic growth projections for this year Morocco is considering trimming economic growth projections for this year because bad weather has hit its key agriculture sector, government officials said on Tuesday. Projected gross domestic product (GDP) growth could be cut to 3.5 percent from a budgeted 4.2 percent.
The officials asked not to be identified because Finance and Economy Minister Nizar Baraka plans to present the 2012 draft budget to parliament on Thursday with the initial 4.2 percent GDP growth projection.
“It’s in the works,” one official told Reuters when asked if the government would revise down economic growth projections for this year amid forecasts of a drop in agricultural output in 2012.
“Bad weather conditions marred the farming season this year and ... amid the slowdown affecting tourism from the main EU market we should post a growth of 3.5 percent,” said the official on condition of anonymity.
A second government source said GDP growth in 2012 could fall to as low as 2.5 percent if the deficit in rainfalls registered this year extends to the months of March and April.
“The (GDP) growth will fall to as low as 2.5 percent in 2012 if we match the cereals harvest we had in 2007,” the source said.
Baraka , the finance minister, and Budget Minister Idriss Azami al-Idrissi could not immediately be reached for comment. The High Planning Authority (HCP), the state’s body in charge of establishing and updating growth projections, declined to comment.
The north African country’s state-run agricultural research institute told Reuters last week that Morocco’s cereals harvest this year will not reach half of last year’s level, when the economy posted a GDP growth of 5 percent.
The shortage, which would ratchet up cereal import needs, comes at a sensitive time for the $100-billion economy, which relies on agriculture for 14 percent of its output.
Morocco’s balance of payments deficit rose in 2011 to its biggest since the 1980s amid slackening growth in the euro zone, Rabat’s main trade partner and top source of tourist visitors.
While state subsidies for energy and food staples help Rabat to keep inflation under control, a slowdown in GDP growth coupled with a surge in the government’s budget deficit may reduce the economy’s ability to create jobs.
Across Morocco, there are regular bouts of protests -- sometimes spilling over into riots -- against poverty, official corruption and the perceived failure of the state to help.
The country has, however, managed to avoid some of the “Arab Spring” turmoil that has struck other north African countries.
Agriculture employs 40 percent of the 11-million workforce in Morocco, one of the world’s ten biggest cereal importers, which relies heavily on rain due mostly to the predominance of subsistence and rudimentary farming.
Last year’s harvest stood at 8.34 million tons and included 4.17 million tons of soft wheat, 1.85 million tons of durum wheat and 2.34 million tons of barley.
Morocco’s cereals harvest in 2007 stood at 2 million tons, which covered about a quarter of the North African country’s domestic needs.