Beyond the current crisis at the Ceuta border, relations between Spain and Morocco are as long- standing as they are deep. Spain is Morocco’s main trading partner and Spain is both its main supplier (more than 15% of Moroccan purchases are from Spanish companies) and its main buyer. More than 24 per cent of Moroccan exports go to Spain. More than 20,000 Spanish companies have investments there worth some 9 billion euros.
In addition to the investments made there, there are also exports worth 8.5 billion euros in 2019 (3% of total Spanish exports), making this market the seventh largest for Spanish trade in goods. In 2020, despite the crisis generated by the pandemic, more than 7.3 billion euros were exported (-13%). For example, through the public company Red Eléctrica, Spain provides Morocco with 17% of its electricity supply.
By contrast, Spanish imports from Morocco totalled 7 billion in 2019 (2.3% of total Spanish imports) and only fell by 9% in 2020, in a year marked by the pandemic, to 6.3 billion euros, making Morocco Spain’s tenth largest supplier.
Morocco: A robust recovery expected
According to analysts at Crédito y Caución, Morocco will grow by 5% this year.
With a 7% GDP contraction in 2020, the Moroccan economy was hard hit by the coronavirus pandemic. Far-reaching local lockdown measures hampered domestic economic activity, while exports decreased a whopping 15%, with tourism (which accounts for 12% of GDP) severely impacted. Unemployment increased from 9% in 2019 to 12% in 2020. Additionally, a lasting drought weighed on the agriculture sector (which employs about 40% of the Moroccan workforce and accounts for about 15% of GDP). That said, the phosphate-mining industry (which accounts for 9% of GDP) held up well, with exports increasing by 4% in 2020.
This year, the economy is forecast to rebound by about 5%, contingent on the gradual easing of lockdown measures, an effective vaccine rollout in H2 of 2021 and more benign weather conditions supporting agriculture performance. Private consumption is expected to rebound by more than 8% this year. Industrial production is forecast to increase 8%, and work on infrastructure improvement projects (roads, ports and railways) has resumed.
A major factor determining the pace of the rebound will be the scope of recovery in Europe, Morocco’s main export market. Aeronautic and automotive goods accounted for 40% of exports in 2019 and remain potential key growth drivers. However, they suffered last year from deteriorated Eurozone demand. About 90% of Morocco’s cars and car parts are exported, of which 80% go to Europe. A new automotive factory by a large French OEM in the city of Kenitra will increase vehicle production capacity by 50% in 2021, likely giving a boost to exports.
While exports of goods and services are forecast to grow by almost 9% in 2021, recovery in the tourism sector will remain muted for the time being. It will be highly dependent on economic growth and the lifting of travel restrictions in Europe.