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Morocco Higher Planning Commission Predicts Improvement in Economic Growth

A worker picks strawberries, to be exported, in a field in Moulay Bousselham in Kenitra province, March 15, 2014. (Reuters)
A worker picks strawberries, to be exported, in a field in Moulay Bousselham in Kenitra province, March 15, 2014. (Reuters)
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Morocco Higher Planning Commission Predicts Improvement in Economic Growth

A worker picks strawberries, to be exported, in a field in Moulay Bousselham in Kenitra province, March 15, 2014. (Reuters)
A worker picks strawberries, to be exported, in a field in Moulay Bousselham in Kenitra province, March 15, 2014. (Reuters)

Morocco's economic growth is expected to rise slightly in Q4 of 2019 to 2.6 percent, after falling to 2.4 percent in Q3 due to the contraction of global trade and slowed growth of non-agricultural activities, according to the country’s Higher Planning Commission.

In a memorandum Tuesday, the Commission expected Morocco's exports to improve, despite the difficult conditions resulting from the contraction of global trade.

Regarding automobile exports, the Commission expected that the sector will continue to decline, especially fully assembled vehicles, due to the drop in global demand for cars, most notably in the European and Chinese markets.

The export of parts and electrical components of cars manufactured in Morocco is linked to demand in the European market, it added.

Moroccan phosphate fertilizer exports will see modest growth during Q4 of 2019. The Commission pointed out that this period is expected to witness strong pressure on fertilizer prices following the increased demand on Asian fertilizer and declining global demand due to lower prices of agricultural products.

The Commission also noted that the dynamics of Moroccan exports of fertilizers will be affected by lower US and Indian imports, but will benefit from improved South American demand.

According to the Commission, the mining and manufacturing sectors will grow by 3 percent and the tourism sector by 2.3 percent.

Overall, the Commission forecasts that the agricultural sector will continue its contraction for the fourth consecutive quarter, and will stand at 2.6 instead of 2.8 percent compared to the same period last year.

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FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
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FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.