Morocco's GDP to grow 3-4 pct in 2012

The Moroccan economy should grow 3 to 4 percent in 2012 versus the 4.2 percent outlined in the budget, the finance ministry's economic forecasting unit said on Thursday, two days after the central bank said growth may fall as low as 2 percent. Mohamed Chafiki, head of the ministry's economic forecast unit (DPEF), said the impact of bad weather on agriculture was the main reason for the downward revision. "Domestic consumption is now the main engine of growth," Chafiki told Reuters. Wage hikes the government, businesses and unions agreed to last year will inject 13 billion dirhams into the economy each year, while the key cereal harvest is likely to fall, he said. "Cereals accounted for only 18 percent of agriculture's added value in 2011... This percentage will significantly shrink this year as we expect a lower cereals harvest," he added. Central Bank Governor Abdellatif Jouahri on Tuesday predicted the economy would grow 2 to 3 percent in 2012, versus last year's near-5 percent growth performance. Jouahri cited a drop in agricultural output, including an expected 55 percent fall in the cereals harvest this year, and the crisis in the euro zone hitting Moroccan exports and tourism. Government officials told Reuters earlier in March that economic growth may be trimmed to at least 3.5 percent and could fall as low as 2.5 percent if this year's cereals harvest falls to 2 million tonnes. Chafiki said agriculture accounts for 12 to 15 percent of gross domestic product (GDP) depending on weather conditions.   "The services and industry sectors fared well in the first quarter of 2012, although the picture remains fuzzy for the tourism sector," said Chafiki. The north African country's state-run agricultural research institute told Reuters in March that the cereals harvest this year will not reach half of last year's 8.34 million tonnes level. The shortage, which would ratchet up cereal import needs, comes at a sensitive time for the $100 billion economy, which relies on agriculture for 40 percent of jobs.