January 14, 2020 / 10:15 AM / 8 days ago

UPDATE 1-Morocco 2020 economic growth seen rising to 3.5%

(Adds other forecasts)

RABAT, Jan 14 (Reuters) - Morocco’s economic growth should rise to 3.5% in 2020 from 2.3% last year, the official planning agency forecast on Tuesday, though it noted the vulnerability of agriculture to variable rainfall.

The agency said its forecast was based on the assumption of an average crop yield, as well as a rise in exports and government measures to raise tax revenue and investment.

However, it forecast that the government would not meet its budgeted deficit of 3.5% of gross domestic product (GDP), but that the deficit would instead remain unchanged from last year at 3.7%.

It expects public debt to narrow slightly to 66% of GDP compared to 66.2% in 2019.

The agency projected domestic demand to rise by 4% in 2020 from 2.4% last year, and saw improving global economic conditions leading to a growth in external demand to 5.4% from 4.2%.

Inflation will rise to 1.1% in 2020, from 0.8% in 2019, it said.

It forecast the current account deficit to stay almost unchanged at 4.7% in 2020 from 4.8% last year.

The agency urged the government to improve efficiency and governance of its investment plans, saying a 4-percentage point increase in public investment in productive sectors could help boost growth to 5%.

A quarter of Moroccans are either poor or at risk of poverty, according to a recent World Bank report, and the kingdom ranks 123rd in the United Nations’ human development index. (Reporting By Ahmed El Jechtimi; Editing by Angus McDowall, Andrew Heavens and Andrew Cawthorne)

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