Washington D.C. - Each year, the Economists publishes their predictions on the economy and politics of countries for the next coming year.
The Economist has now published their “2016 forecast” for the Middle East and Africa.
For the November 2016 scheduled Parliamentary elections, The Economist predicts that the Party of Justice and Development, which head the coalition government, will once again maintain its dominance.
The GDP growth rate will be at 4.4 percent. In the third quarter of this year, Morocco’s GDP expanded by an annual rate of 4.5 percent.
The International Monetary Fund earlier this month forecasted growth this year of 4.7 percent. However, in early 2016, the IMF predicts it would go down to 3.1 percent.
According to the Economist’s prediction, the GDP may even out from a rocky beginning in 2016.
GDP growth next year has been talked about among economists, saying that “Growth is expected next year by more modest agricultural output.” Agriculture accounts for 15 percent of gross domestic product (GDP) in Morocco, so, growth may come at the peak season for crops.
The Economist also predicted the GDP per capita based on US dollars would drop around 30 US Dollars from the current 3,092 to 3,060. Last year, the Economist overestimated the GDP per capita for 2015 at 3,250 US Dollars.
Perhaps the most surprising prediction is the budget balance of -4.8, which is not very different from the current at -4.7 this year.
This deficit and means the Moroccan government has been spending more than their revenue increase. This can be compared to Algeria with a similar population size whose budget balance -7.3 and Saudi Arabia with a much smaller -1.9 deficit.
The deficit will call for narrow budget cuts, according to the Economist. The Economist predicts this will cause street protests, “but not on a scale to alarm the regime.”
In last year’s prediction, The Economist said 2015 will see “subsidy and pension reforms that will boost the fiscal position, but will work against attempts to lift incomes and consumption.”
There have already been strikes regarding pension reform this past year. Pension reform remains a vulnerable segment of Moroccan society. There is currently a large discrepancy between trade workers’ pensions and those of MPs who make 8,000 MAD/month, but do not hold their positions for a lifetime.
The Economist did not mention anything about pension reforms for 2016. As this is currently on the table, much remains to be seen how the government balances their budget to keep in mind the citizens’ disapproval of high pensions in elected positions.
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