Losses from Al Haouz earthquake now estimated at MAD 3 billion

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A study published by the Policy Center for the New South in Morocco concludes that the earthquake that struck the Al Haouz region last September cost an economic loss of around 0.24% of GDP in 2023, or around 3 billion dirhams.

The study, carried out in English by 6 Moroccan and foreign experts and published a few days ago under the title “Assessment of the economic impact of the Al Haouz earthquake: damage and reconstruction strategy”, indicates that economic activity in the Marrakech-Safi area fell by 1.3% last year, while the province of Al Haouz generated around 10.2% of regional GDP.

The September 8 earthquake, classified as the most violent in Morocco for more than a century, killed 3,000 people, injured more than 4,000 and damaged around 60,000 homes.

According to the study, the earthquake “was a human tragedy with moderate economic losses, particularly at the macroeconomic level, embodying the resilient nature of the Moroccan economy after the natural disaster”.

The study by the Policy Center for the New South is the first to estimate the scale of the losses from this natural disaster. Even the Bank of Morocco has not released any forecast figures, stating only in a press release following its board meeting at the end of last year that “the toll of the Al Haouz earthquake is heavy in terms of human losses, but its impact on the economy is likely to be small”.

The province of Al Haouz topped the list of hardest-hit regions with around 53% of the total economic loss, equivalent to 1.2 billion dirhams, followed by the province of Taroudant with an estimated loss of 739 million dirhams, while the provinces of Chichaoua , Marrakech, Ouarzazate and Azilal together suffered an estimated loss of around 305 million dirhams.

The research center’s study also looked at the impact of the general reconstruction and rehabilitation program for disaster-stricken areas, to which the Kingdom has allocated 120 billion dirhams (representing 8% of GDP) with the aim of providing emergency aid to families and financial assistance to construct damaged buildings. housing, rebuild infrastructure and develop the affected areas, as well as boosting economic activity in the High Atlas regions in general.

According to the experts’ conclusions, this program will have only a slight positive impact on national growth, averaging 0.03 percentage points over the period 2024-2028. Affected areas, on the other hand, will experience significant growth, regardless of financing, which may depend more on the reorientation of public investment than on recourse to increased indebtedness.

In this respect, the research center pointed out that Moroccan policymakers will be faced with the challenge of striking a compromise between efficiency and equity when transferring financial resources from non-affected to affected areas. Given the policy of reducing spatial disparities in Morocco, equity may be favored over efficiency.