How does the Morocco Earthquake affect the Country’s Economy?
The Morocco earthquake has had a significant impact on the country’s economy, as the nation grapples with ongoing rescue efforts to find victims buried beneath the rubble.
On September 8th, a powerful earthquake measuring 6.8 on the Richter scale struck western Morocco. resulting in severe loss of lives and property. making it the most devastating earthquake since the 1960 Agadir earthquake. which also claimed thousands of casualties.
Red alert
The earthquake has had major economic repercussions. prompting the U.S. Geological Survey to classify the expected death toll .and economic losses from .this destructive earthquake as a “red alert.” This indicates the likelihood of significant economic losses and widespread. severe damage.
In its latest update, the U.S. Geological Survey estimated that economic losses could reach approximately 8% of the country’s Gross Domestic Product (GDP). which could amount to around $10.7 billion. according to the agency’s estimates.
However, Moroccan economic sources .have stated that it is “too early to estimate the extent. and scale of the. losses caused by the earthquake.” especially. since these losses extend to various sectors through “indirect losses.”
Losses in mountainous regions
While these estimates. have been put forward. Moroccan experts have a different opinion, describing them as “exaggerated.” particularly since the earthquake hit mountainous regions with limited economic activity. primarily based on simple livelihoods.
Private sources have also revealed that it is currently. impossible to assess the size of the. losses either accurately or approximately. especially since the earthquake-affected. area consists of scattered .and remote mountainous regions. They pointed out .that the disaster that struck the southern region. especially the suburbs of Marrakech. is a very serious catastrophe. Therefore, the estimates related to potential economic losses. such as those issued by the U.S. Geological Survey. may be accurate. and not exaggerated.
The extensive damage suffered by the affected regions indicates .the cost of addressing this situation through government efforts that .are expected to be initiated to organize matters and determine the fate of those affected.
Economic analyst Ali Idriss stated that any wide-ranging reconstruction effort would add pressure to the economy. which has been. under stress for over two years. Morocco‘s economy heavily relies on tourism. which is affected in the earthquake-damaged areas.
Idriss noted that there were signs of improvement in Morocco earlier this year. and before the earthquake, authorities were targeting. economic growth of 3.4% for this year. and planning to reduce the budget deficit from 4.5% of GDP to 4% in 2024.
