The High Commission for Planning confirmed the expected recovery of domestic demand during the first quarter of 2024, contributing 6.7 points to the total economic growth, compared to -0.1 points during the same period last year. It is predicted that household consumption will increase by 2.7% instead of 0.1% on a yearly basis.
This rise is partially due to the impact of the calendar related to the increase in consumption expenses during and before the month of Ramadan and the improvement in purchasing power resulting from the recession of inflationary pressures. The households’ consumption spending will mainly focus on food products and imported consumer final products.
On the other hand, it’s expected that the consumption of public administrations will increase by 3.4% instead of 2.7% in the same quarter of the previous year, benefiting from an increase in operating expenses. The contribution of net external demand in the total economic growth is expected to remain negative, reaching -3.9 points during the first quarter of 2024, following an increase in the volume of the national importation of goods and services by an equivalent of 17.3%.
Investment expenditures will continue their dynamism at a strong pace for the third quarter in a row, with the gross capital formation increasing by 17.3% in the first quarter of 2024. Companies are expected to benefit from the improvement of their margins during the previous year supported by inflation, and will increase their reliance on borrowing from banks to finance their investment projects.
At the end of February 2024, the data of the loans allocated for equipment show an increase of 10.8% on a yearly basis, compared to -4.6% during the same period last year. Construction sector investments are also expected to see improvement, backed by government programs related to the development of some stadiums set to host the African Nations Cup 2025, and the rebuilding and repair of regions affected by the Al Haouz earthquake, in addition to the housing acquisition support program.
