Growth, Inflation, Demand: How 2022 Starts (HCP)

HCP publishes on Tuesday, April 12, 2022, its quarterly economic report, which reports on the status of key economic indicators for the fourth quarter of 2021, estimates for the first quarter of 2022, and reports on forecasts for the second quarter. Numbers rated Where projected it contains, does not come from national accounts (for example, with regard to growth rates); nor indexes (for inflation). But they are an interesting reflection of economic development at this stage.

Economic growth: sustainability

After an excellent performance in 2021 (+7.4% per annum, preliminary figures from the national accounts), the year starts timidly (like 2021, by the way), with 1st trimestergrowth rate is estimated at 1.2%: increase 3.3% value added excluding agriculture and flee 12.1% agricultural activity.

AT second trimester Growth in non-farm activities should develop at a more sustainable pace in 2022, driven by the continued recovery of tertiary industries. With a fall in value added in agriculture by 12.9%, the growth of the national economy will be 1.8% in the second quarter of 2022 compared to 15.2% in the same quarter of 2021.

Foreign trade: price-driven export dynamics

The volume of national exports of goods and services was expected to grow by 5.6% in the first quarter of 2022 in the face of a sharp increase in export prices.

In value terms, merchandise exports would indeed increase by 29.5% year-on-year instead of 12.6% a year earlier.

This change would be driven mainly by an increase in external sales. phosphates and its derivatives, which would contribute 14.5 points to the overall evolution of merchandise exports in value terms.

Excluding phosphates and derivatives, exports would have increased by +19.3% due to the recovery of external industry sales. aeronautics by 61.5% instead of -17.3% in the first quarter of 2021, and sales in textile which is reported to have increased by 28.2% over the same period.

From my side, import goods in value terms would have increased by 37% instead of 2.6% over the same period in 2021. This acceleration would be due to an 88.8% increase in grocery purchases. energy in connection with the growth of world prices for refined products, especially for diesel fuel and fuel oil.

Purchases of semi-finished products would also be dynamic, accounting for 10.9 points in the overall import trend, followed by foodstuffs with a contribution of 5.3 points and capital goods, which would increase by 20.3%. On the other hand, imports of finished consumer goods slowed down somewhat due to a 15.7% drop in imports of passenger cars.

A more pronounced increase in imports relative to exports would have exacerbated the merchandise trade deficit and resulted in a 3.5 point decrease in the import-export coverage ratio in the first quarter of 2022 compared to the same period last year. 2021.

Slowdown in domestic demand

AT first quarter of 2022, domestic demand would experience a significant slowdown compared to 2021, but would remain the main support for activity. Much of its growth would be due to a 5.3% increase in general government consumption in line with an increase in operating expenses.

On the other side, household consumption growth slowed down significantly, reaching +0.8% in the first quarter of 2022 instead of 1.5% in the same period last year. A fall in agricultural income would have affected household spending in the face of heightened inflationary pressures.

Manufacturing investment, for its part, would increase by 2.9% year on year in the context of moderate investment in construction.

Inflation at the highest level since 2008

The consumer price trend observed in the fourth quarter of 2021 would accelerate by first quarter of 2022. On an annualized basis, consumer prices would rise at a rate not seen since 2008, increasing by 3.6% instead of 0.1% over the same period in 2021.

This acceleration would be mainly due to rising food prices. food by +5.3%. Prices for stale foodstuffs would rise by 6.4% due to higher prices for cereals and vegetable oils. Prices for fresh produce would also rise, especially for poultry meat, which would result in a 1.9 percentage point rise in prices.

Excluding food, prices would rise by 2.5%, driven by higher energy prices, transport costs and higher prices for manufactured goods amid supply tensions and higher industrial production costs. .

Core inflation, which excludes prices subject to government intervention and products with price volatility, is expected to rise sharply to reach +3.4% in the first quarter of 2022, driven by a very dynamic evolution of its components, in particular food and manufacturing .

National economic activity: more

AT first quarter of 2022, economic activity would have increased by 1.2% year on year instead of 1% a year earlier, mainly due to a 3.3% increase in value added excluding agriculture. branches tertiary, which would continue to benefit from the favorable base adjustment effect would contribute +1.9 points to the change in GDP driven by the continued recovery in tourism activity. On an annualized basis, the added value of accommodation and meals would have increased by 53.4% ​​in the first quarter of 2022 due to the improvement in the epidemiological situation in Morocco and the opening of air borders from February 7, 2022.

Business growth secondary For its part, it would accelerate slightly, bringing its contribution to overall GDP growth to +0.5 points instead of +0.4 for the same period in 2021. The value added of the mining industry would have declined by 4.2% in the first quarter of 2022, in an annual variation after a 5.2% increase was recorded a year earlier. Production of non-metallic minerals decreased by 5.3% due to a drop in demand from local processing enterprises.

On the other hand, industrial activity production will continue to recover at a rate of 2.7% in the first quarter of 2022 compared to 1.6% in the same period of 2021. Despite rising production costs associated with rising raw material prices and supply issues, manufacturing activity appears to have resisted well, in part due to the strengthening of the textile, steel and steel industries. On the other hand, the chemical industry, which was particularly dynamic in 2021, would experience a 2.2% decline in its value added in the context of lower exports of phosphate derivatives, which was largely offset by an increase in their sales. export price.

Decline in agricultural activity after four consecutive quarters of growth

Agriculture value added was set to contract by 12.1% in the first quarter of 2022 year on year after being particularly strong in 2021, suffering from a 65% rainfall deficit at the end of the first 6 months of the agricultural period . agricultural campaign 2021/2022 compared to the same period of a normal year. The consequences of this shortfall would be particularly felt at the level of winter and winter crops, especially cereals, which would decrease planted area by 21% compared to the five-year average. The planting of other crops, in particular horticulture, would also be disrupted by low irrigation costs in the context of a reduction in dam filling rates to 33% at the end of March 2022, instead of 51% per year. previously. Livestock would also suffer from a lack of vegetative pasture and higher prices for animal feed. However, livestock should show modest growth, mainly due to improved poultry operations, with a 10.7% increase in day old chick production at the end of the first two months of 2022.

Slight acceleration in economic growth in the second quarter of 2022 (forecast)

AT second quarter 2022the development of the global economy will remain dependent on the epidemiological situation, especially in China, as well as the consequences of the Russian-Ukrainian conflict, which will affect the growth prospects of the global economy for the whole of 2022.

In addition, higher commodity prices, especially energy and agricultural commodities, coupled with disruptions to global supply chains, are expected to weigh on the recovery of advanced economies. In this context, external demand addressed to the national economy should show an increase of 3.1% in the second quarter of 2022 on an annual basis instead of 20.7% in the same period last year.

domestic demand experience, for its part, slight acceleration in the second quarter of 2022, providing an overall economic growth of 3.3 points. This should be driven, in part, by continued increases in government spending, while household spending should continue to be affected by sustained strong inflationary pressures.

In this context, added value excluding agriculture should show growth of 4.1% in the second quarter of 2022., year after year. The tertiary industries should have a special impact, the contribution of which to the overall economic growth should be +2.4 points. In the secondary sector, mining should return to positive growth, contributing to a 2.8% increase in the value added of secondary industries.

In general, and taking into account the fall in value added in agriculture by 12.9%, economic activity should show growth by 1.8%in the second quarter of 2022 on an annualized basis, instead of +15.2% recorded on the base effect in the same quarter of 2021.

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