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.”



Saudi PIF Invests $200 Million in ETF Bond Fund

The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)
The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)
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Saudi PIF Invests $200 Million in ETF Bond Fund

The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)
The fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). (Asharq Al-Awsat)

State Street Global Advisors, a subsidiary of State Street Corporation, announced that Saudi Arabia’s Public Investment Fund (PIF) has invested SAR 750 million ($200 million) in the newly launched SPDR J.P. Morgan Saudi Aggregate Bond ETF.

According to a statement released by the company on Wednesday, this fund is the first of its kind in Saudi Arabia to focus on fixed-income exchange-traded funds (ETFs). It is listed in both the London Stock Exchange and Germany’s Xetra, offering investors the opportunity to track government and quasi-government bonds denominated in either the Saudi Riyal or the US Dollar, including sukuk (Islamic bonds).

This investment aligns with the objectives of Saudi Vision 2030, representing a significant step toward enhancing the international presence of Saudi Arabia’s financial markets and attracting foreign investments. The fund is available to investors across several European countries, including Austria, Denmark, France, Germany, and Italy.

Commenting on the investment, Yazid Al-Humaid, Deputy Governor and Head of MENA Investments at PIF, said: “The fund continues to create opportunities and enable access to diverse capital markets in the Kingdom. Investing in the first internationally listed Saudi fixed-income ETF underscores PIF’s commitment to deepening Saudi capital markets, attracting investors, and fostering partnerships across global financial centers.”

CEO of State Street Global Advisors Yi-Hsin Hung emphasized that the launch of the fund is a significant milestone in providing innovative opportunities for investors while contributing to Saudi Arabia’s economic growth.