Morocco's Economic Growth Expected to Slow Down in Q1 2019

People shop in a photo illustration at vegetable market in Casablanca, Morocco, June 29, 2017. (File photo: Reuters)
People shop in a photo illustration at vegetable market in Casablanca, Morocco, June 29, 2017. (File photo: Reuters)
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Morocco's Economic Growth Expected to Slow Down in Q1 2019

People shop in a photo illustration at vegetable market in Casablanca, Morocco, June 29, 2017. (File photo: Reuters)
People shop in a photo illustration at vegetable market in Casablanca, Morocco, June 29, 2017. (File photo: Reuters)

Morocco’s economic growth is expected to record a 2.5 % during Q1 of 2019 compared to 3.3 % in Q1 2018, Morocco's Higher Planning Commission said on Wednesday.

Growth in the Q4 of 2018 was affected by the slowdown in added value, excluding agricultural activity, by 2.6 percent, compared with 3.4 percent during the same period of 2017.

The Commission said on its website that the agricultural sector grew 3.4 percent in Q4 of last year, compared to 4.1 percent during the first three quarters. This slowdown is partly due to the decline in livestock production.

Manufacturing growth in the last quarter of 2018, according to published estimates, also slowed to 2.8 percent from 3.2 percent in the same period a year earlier, as food industries slowed and demand for building materials fell.

However, chemical industry maintained its "dynamism" and grew 6.1 percent, and the added value of the textile and leather sectors increased 5.8 percent with the increase for the external demand for these products.

Mechanical and electronic industries grew 3.6 percent supported by demand from the automotive industry, stated the report.

Morocco's exports in the fourth quarter of 2018 increased 5.1 percent, thanks to higher sales in the aviation and automobile sectors, which contributed 80 percent to the growth rate of exports.

Food, clothing and electronics sectors contributed to a 0.9, 0.6 and 0.5 percent growth, respectively, as external demand for these products increased.

Imports recorded a 5.8 percent rate higher than exports, as the country was affected by the rise in global fuel prices, which contributed 2.2 points to import growth. In contrast, imports of foodstuffs, precisely wheat and sugar, declined during that period.

Industrial investment slowed in Q4, which was reflected on imports of processing materials that only increased 2.1 percent, compared to an 11 percent increase in the previous quarter.

Investment in construction was modest, with weak demand for housing, especially medium and high, stated the report.

For the first quarter of 2019, the Commission said that the expected slowdown will come from a decline in agricultural added value, estimated at 0.7 percent, although livestock production will see some improvement compared to the end of 2018.

“Overall, the non-agriculture added value is expected to record a 2.9 percent increase, according to the annual change.”



Oil Rises as Investors Weigh Market Outlook, Tariffs, Sanctions

A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
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Oil Rises as Investors Weigh Market Outlook, Tariffs, Sanctions

A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk
A view shows oil pump jacks outside Almetyevsk in the Republic of Tatarstan, Russia June 4, 2023. REUTERS/Alexander Manzyuk

Oil prices rose by around 1% on Friday as investors weighed a tight prompt market against a potential large surplus this year forecast by the IEA, while US tariffs and possible further sanctions on Russia were also in focus.

Brent crude futures were up 76 cents, or 1.11%, at $69.40 a barrel as of 1153 GMT US West Texas Intermediate crude ticked up 82 cents, or 1.23%, to $67.39 a barrel.

At those levels, Brent was headed for a 1.6% gain on the week, while WTI was up around 0.6% from last week's close.

The IEA said on Friday the global oil market may be tighter than it appears, with demand supported by peak summer refinery runs to meet travel and power-generation, Reuters reported.

Front-month September Brent contracts were trading at a $1.11 premium to October futures at 1153 GMT.

"Civilians, be they in the air or on the road, are showing a healthy willingness to travel," PVM analyst John Evans said in a note on Friday.

Prompt tightness notwithstanding, the IEA boosted its forecast for supply growth this year, while trimming its outlook for growth in demand, implying a market in surplus.

"OPEC+ will quickly and significantly turn up the oil tap. There is a threat of significant oversupply. In the short term, however, oil prices remain supported," Commerzbank analysts said in a note.

Further adding support to the short-term outlook, Russian deputy prime minister Alexander Novak said on Friday that Russia will compensate for overproduction against its OPEC+ quota this year in August-September.

"Prices have recouped some of this decline after President Trump said he plans to make a 'major' statement on Russia on Monday. This could leave the market nervous over the potential for further sanctions on Russia," ING analysts wrote in a client note.

Trump has expressed frustration with Russian President Vladimir Putin due to the lack of progress on peace with Ukraine and Russia's intensifying bombardment of Ukrainian cities.

The European Commission is set to propose a floating Russian oil price cap this week as part of a new draft sanctions package, but Russia said it has "good experience" of tackling and minimising such challenges.