The Moroccan economy will see significant consequences from the coronavirus pandemic. Tourism has been at a standstill since March and will remain so until May at the earliest. The automotive sector and remittances from the Moroccan diaspora will also be hit by the crisis in Europe. However, and provided that the situation improves in the second half of the year, Morocco should be able to avoid recession. Macroeconomic fundamentals are solid and the country will benefit from a substantial fall in oil imports. Moreover, the authorities have reacted swiftly to dampen the shock.
Through economic consolidation measures implemented since 2016, Egypt has corrected its macroeconomic imbalances and regained the confidence of international investors. Foreign currency liquidity has returned to satisfying levels, the public account deficit is narrowing, although debt service is maintaining the fiscal deficit at a high level. Inflation is still relatively high but easing. Economic prospects are favourable. So far, the macroeconomic recovery has failed to trigger new momentum capable of accelerating growth and creating jobs. The weight of public sector and a large informal sector reduce the economy’s responsiveness to positive macroeconomic signals. Structural reforms are necessary to preserve the achievements of ongoing reforms.
Egypt is implementing an ambitious programme of economic reforms. Macroeconomic imbalances are being reduced thanks to the pound flotation and some progress in fiscal reforms. Nevertheless, households’ purchasing power is affected by a sharp rise in consumer prices, and the hike in interest rates is a threat for public finances.
Morocco’s economy retains several characteristics that provide a solid basis for the future. The macroeconomic environment is solid, infrastructures are good and the banking system is sound and sophisticated. The Kingdom is also capitalizing on its potential as a manufacturing hub. The automotive industry is now the largest source of exports, and several development projects are in the pipe. But the modest economic growth since 2013 is a reminder of structural obstacles yet to overcome.
