In Morocco, GDP growth disappointed again in Q4 (+2.7% y/y). Overall, the growth profile observed in 2018 appears relatively bumpy as Q2 was already quite weak. The non-agricultural sector was affected in Q2 and Q4 by an increasing oil price that affected household perception. The unemployment rate remained quite high at 10% in Q3 2018 with a particular weakness among the urban young population (about 40% are unemployed) that reveals some difficulty to create enough jobs in net terms. It shows the human cost of business insolvencies. In 2018 as a whole, overall GDP grew by +2.9% and the non-agricultural sector +2.8%. In the current environment, this is below the level where insolvencies stop to increase. As a result, business insolvencies have been on the rise again since Q2 2018 and should increase further in 2019 (+4%), weighing on the job market. This evidence of a mild deterioration will have an impact on GDP growth, which is expected at +2.7% in 2019.
