Coronavirus: The impact of the Moroccan Economy - Business News

the severity of the coronavirus pandemic has prompted governments in more than 200 countries around the world to take drastic preventive measures, to the detriment of their economies. The impact of the pandemic on the global economy could be between $ 2,000 billion and $ 4.1 trillion, or 2.3% to 4.8% of global GDP, the Asian Development Bank (ADB) said. As for the IMF, it qualifies this crisis as being the worst since the great depression of 1929. The world stock markets collapsed in March, the price of a barrel of oil fell in the negative for the first time in history, and unemployment is skyrocketing everywhere.

Preventive measures taken by Morocco
Morocco has been less affected by the pandemic to date, compared to Italy, Spain, the United States, France and China, which have suffered the most casualties. We can only welcome the strategy adopted to fight this pandemic. Morocco has been at the forefront of countries around the world since March 13 in terms of containment measures and the fight against the spread of the virus:

Friday March 13 already, and with only 8 proven cases and one death, Morocco closed its borders.
Sunday March 15, with a case of death due to the virus, Morocco had already suspended all international flights.
The next day, Monday March 16, with 29 cases of contagion, Morocco closed schools, universities and all training centers. The Interior Ministry announced a ban on gatherings of more than 50 people, ordering the closure, at the same time, of public places such as cinemas, museums, cafes and restaurants. A little later, it was decided to close the mosques until further notice.
On Friday March 20, the authorities took another turn of the screw by deciding on compulsory health confinement. It is no longer allowed to leave your home except to go to work, to the doctor, to the pharmacy or to go shopping.
Saturday March 21 (96 cases including two deaths), RAM suspended its domestic flights. The ONCF also suspended line trains and reduced the frequency of TNR between Kenitra and Casablanca to a minimum.
On April 18 the state decides to extend the confinement until May 20
Impact of the pandemic on the Moroccan economy
Morocco is leading efforts to, on the one hand, contain the spread of the virus on its soil, and, on the other, to save its national economy, whole sections of which have had to suddenly lower the pace or give way completely to a standstill . The consequences of the pandemic on the Moroccan economy are very difficult to assess, because no one knows when it will end. But already, the High Commissioner for Planning unveiled on April 22 a study on the immediate impact of the crisis:

National economic growth would be cut by 8.9 points, in the second quarter of 2020, compared to its pre-Covid-19 crisis, instead of -3.8 points expected on April 7, This decrease would represent a potential overall loss of around 29.7 billion DH for the first half of 2020, instead of 15 billion DH expected on April 7
Nearly 142,000 companies, or 57% of the economic fabric, have permanently or temporarily stopped their activities. VSEs are the most affected: they represent 72% of companies in difficulty, while 26% are SMEs and only 2% of large companies.
The growth of foreign demand addressed to Morocco has been revised downwards to -12.5% ​​in the second quarter of 2020, instead of -6% expected on April 7, following the expected decline in imports from the main trading partners of the country. Kingdom
The worsening deficit is mainly explained by the increase in social and economic spending related to Covid19 and the decrease in tax revenues, in particular from corporate tax, therefore, central government debt could peak to 73% of GDP in 2020.
Investment, meanwhile, should continue to decline by -26.5% compared to the second quarter of 2019,
A sharp slowdown in exports, tourism receipts and remittances is expected as the pandemic disrupts trade and global value chains.
Global uncertainty in the labor market leads to the loss of jobs and income, without knowing when they could be restored
27% of companies have temporarily or permanently reduced their workforce, which represents nearly 726,000 jobs, or 20% of the workforce of organized companies, excluding the financial and agricultural sector.
Some sectors have shown early signs of vulnerability such as tourism, transport and logistics in supply chains, but also – and more difficult to measure – the cross-cutting informal sector. As expected, the most affected sector is the accommodation and catering sector,

89% of businesses that are at a standstill. They are 76% in the textile and leather industries sector and 73% in the metal and mechanical industries and 60% in construction. Fishing, mining and agribusiness are the sectors least affected by the health crisis, with 24%, 32% and 34% of businesses shut down, respectively.

Impact on the IT sector
The Covid-19 pandemic has had a significant impact on virtually every industry, and the tech sector is no exception.

The main problem facing IT manufacturers during this period concerns delivery times, which are getting longer and longer, due to the suspension of imports. Stocks are emptying, distributors are not able to communicate effectively on delivery times. This severe shortage of equipment risks increasing prices, and makes the planning of projects and deployments haphazard and difficult to structure.

The IT sector depends mainly on local economic dynamics and on the investments of major clients, in particular telecoms operators, banks, private companies and public administrations, and to a lesser extent export consisting mainly of offshoring. Following this Covid19 crisis, all these sectors have revised their investment priorities and also the pace of execution of their current projects if they are not simply stopped. This will have a negative impact on the business of companies operating in the IT sector.

At the same time, we can say that the crisis had a positive impact on the sale of certain IT solutions. Indeed, the switch to teleworking of entire companies, as part of coronavirus business continuity plans, has led to an increase in the use of teleworking and videoconferencing collaborative work solutions and VPN platforms.

These perspectives of impact, remain closely linked to the rapidly changing nature of the pandemic, the responses of policymakers and the global economy. MOROCCO should find the right balance between its action to avoid the social and economic effects of the pandemic while ensuring that the economy is ready to recover quickly after the end of the pandemic.