Oil Prices, Drought Periods and Growth Forecasts in Morocco
The Moroccan economy suffers deeply from two exogenous shocks: high oil prices and drought periods. The irregular rainfall and instability of oil prices increase the volatility of economic growth and the uncertainty around growth forecasts. We exploit the vulnerability to these shocks in order to forecast the economic growth in Morocco. We use for this an Error Correction model linking output and trade balance in a vector augmented by oil prices and cereal production as exogenous variables over the period 1962-2012. The results are in the range and comparable to those of other national institutions and IMF. For example, based on the hypotheses of 97.7 $ per barrel and a moderate cereal production of 70 million quintals, growth is forecasted to be around 3%, in 2014, with a lower and upper bound of 2.5% and 3.4% respectively. The IMF and the High Commission for Planning forecast respectively 3.8% and 2.5%.
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