GDP per capita of Morocco 2010 (time series)

GDP per capita of Morocco 2010

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| Badr Moussadek

Time series project ALGONQUIN COLLEGE

Time Series: Morocco’ GDP per capita Badr Moussadek

Algonquin College Page 2

Table of Contents

Introduction .................................................................................................................................................. 3

THE FOUR COMPONENTS OF TIME SERIES: ....................................................................................................... 3

THE IMPLEMENTATION ................................................................................................................................. 4

Trend Analysis ............................................................................................................................................... 5

Seasonal Variation ........................................................................................................................................ 6

Cyclical and irregular variation ..................................................................................................................... 7

AGRICULTURE ............................................................................................................................................. 7

MINING ..................................................................................................................................................... 8

MARITIME FISHING ...................................................................................................................................... 8

Forecasting .................................................................................................................................................... 9

Discussion...................................................................................................................................................... 9

Conclusion ................................................................................................................................................... 10

Appendix ..................................................................................................................................................... 11

Bibliography ................................................................................................................................................ 14



Gross Domestic Product per capita of Morocco

Introduction GDP per Capita or (GDP ppp) is a very good approach to know the value of goods produced per person in

the country, in fact, GDP per capita is the total GDP of a country for one year divided by the total

number of the people of that country; furthermore, the GDP is the total of the consumption,

investment, Government expenditure, and net export:

GDP = Y=C+I+G+(X-M) And GDP per capita (PPP) = Y/Population.

This report will cover the GDP per capita for Morocco, and approach its expenditure and evolution of

the past 20 years. In the past 20 years Morocco has known a very good progress in the production of its

good and services; hence, it increased its GDP per capita; the table below show the change of GDP per

capita for the past 20 years:

Year GDP PPP Year GDP PPP

1989 1890.648 2000 2665.813

1990 2035.014 2001 2894.569

1991 2208.318 2002 3002.331

1992 2128.369 2003 3223.642

1993 2113.594 2004 3409.111

1994 2339.687 2005 3573.819

1995 2192.38 2006 3927.195

1996 2463.932 2007 4101.879

1997 2410.109 2008 4362.016

1998 2580.464 2009 4587.107

1999 2589.131 2009 4587.107

THE FOUR COMPONENTS OF TIME SERIES: 1. Secular trend: which refers to the long trend of sales, employment, stock price and other

business and economic series; for instance, GDP per capita.

2. Cyclical variation: Which refers to the rise and fall of a time series in a period over one year, this is used to refer to the current state of the economy whether it is in Prosperity, Recession, Depression, or Recovery.

3. Seasonal Variation: Which refers to the patterns of change in a time series within one year and tend to repeat themselves year after year.

4. Irregular variation: is subdivide into; a) Episodic: which is unpredictable, but identifiable (strike or economic status)



b) Residual – Which cannot be identified, and is a feat of chance (Natural Disaster)

THE IMPLEMENTATION

These factors can be implemented into the trend of the Moroccan GDP per capita to explain its variation and cyclical trend. For instance, the secular trend refers to growth in RGDP therefore, increasing the GDP per capita, that’s why we will see in the graph an upward trend line. The seasonal trend is the change in each quarter of the year in the GDP; to understand that we have to mention that the economy of Morocco is based in some part on Agriculture and Tourism; theses two make almost 20% of total GDP, therefore, this will impact the seasonal change. The Cyclical Trend it depends on general economy of the world along with the Moroccan economy; for example in case of recession (2008 the GDP per capita had been reduced less than the previous year); other economic situation can be seen as well like depression then recovery (2009). The irregular Trend is the hardest because of the episodic fluctuation are unpredictable; but can be identifiable (again the strike of the US economy); the residual fluctuation is not noticeable in this trend since there were no sudden catastrophe events in the past twenty years.

Figure 1

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Linear (Morocco GDP per capita (PPP))



Trend Analysis

Where b and a are equal to:

And

Is the slope of the line. Or the average change in GDP per capita for each change of one unit in a time (year or quarter) Is the GDP per capita-intercept. It is the estimated value of GDP per capita

when t=0.

Above is the equation needed to determine the trend line equation, time is the

independent variable and the value of GDP per capita is the dependant variable.

Furthermore, we code the independent variable time to make the equation easier

to interpret. In other words, we replace the year (first year) by 1(t) and second



year by 2, and so on. This equation will help us to forecast the data in the future

with high accuracy holding other variable constant (ceteris paribus). The slope of

the trend line is 14.82. This shows that over the 32 month the GDP per capita

increase at rate of $14.82 per quarter. The value of 696.1 is the intercept of the

trend line on the Y-axis (i.e., for t=0). The standard before being deseasonalized is

showing that the summer is the highest season (or quarter) and the lowest is the

winter.

Figure 2

Seasonal Variation As each seasonal variation, the GDP per capita seasonal variation is changing over the year by season.

The determinant of the Moroccan’ GDP are many, where tourism and agriculture contribute a big part of

it. Because these two components are seasonal, the RGDP will tend to be seasonal as well; thus, making

the GDP per capita to know a seasonal variation. The highest quarter is the summer this is due to a high

entrance of tourism to Morocco that are combined of two parts: first are international tourists and the

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second are almost 1.3 million Moroccan living in Europe and other continent (Indicat et aggregats,

2010); furthermore, Morocco was targeting 10 million tourist for this year (2010), where 7,879,000.0 are

recorded in 2008 combining international (58% are from French and Spain) and Moroccan residing in

exterior (Worldbank data, 2010). On the other hand, most farmers harvest and sell their product in the

end of the spring and beginning of the summer (14.6 the total contribution of Agriculture for the year of

2008). The graph below shows the trend of the seasonal variation for one year.

Figure 3

Cyclical and irregular variation The cyclical irregular variation is almost identical to the original data with the summer being the highest

and the winter is the lowest in each year; however in this graph we can extinguish the four phases of

Morocco economy cyclical , the year 1992 known a drop on the percentage of the RGDP that went to -

4% this is due the recession period that affected most of the word and especially Europe; Morocco is

trading mostly with the European union countries; therefore, any change in these countries economy

will affect directly the Moroccan economy.

AGRICULTURE Agriculture generate and contribute a good part to the GDP, it make a good position in the national

economy by providing 15% of the GDP during the three past years 2002-2004. Furthermore, the GDP

growth rate registered 12% between 2002-2003, due to the good climate condition and rain. However,

the year 2004 was marked by a weak growth which did not exceed 2%. The performances of the

agricultural sector continue to influence those of the whole economy. Between 1996 and 2000,

agriculture contributed slightly to the growth of the GDP with a 0,6 points for an average growth rate of

3,7% (3,1 points for the GDP not including agriculture ). Between 2001 and 2004, with 4,8% average

growth rate of the GDP, agriculture contributed with 1,7 points (against 3,1 for the rest of the

economy). As for food industries, their growth rate amounted to 2% during the period 2001-2003.

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Although the added value generated by these industries amounts to 55% of all processing industries,

their contribution to the economy is still very weak with 8% of global GDP (Economy of Morocco, 2010).

MINING

The mining sector holds an important place in the Moroccan economy. It represents 21% of the

value of exports remittances and employs about 39,225 persons. Morocco contains 3/4 of the

world's phosphates reserves. It is the world's first exporter and third producer.

MARITIME FISHING Morocco boasts two sea coastlines the Atlantic Ocean and the Mediterranean Sea, extending over 3500

Km. With a fleet of 3000 ships and thriving port facilities, Morocco is the most important producer and

exporter of sea products in Africa and the Arab world. The sector of sea fisheries represents 15% of the

overall value of exports and 55% of the value of food exports and it employ 200000 persons.

On the graph we can notice also a slowdown of growth in 2008 (the index shows 85%), which is noticed

by a recession in all over the world this has influenced the Moroccan economy and affected the total

GDP for the year mentioned. Whereas, 2002 we can notice a very good growth in the total GDP that will

affect automatically the GDP per capita, this was due the good climate condition and a growth of

tourism rate (the index shows a growth of 124.1%.)

Figure 4

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Cyclical Irregular Ratios (CxI)



Forecasting

Forecasting is very important for any organization, Good forecast of the future improve the productivity

and certainty of companies along with economies. In the case of a macro-economy for a country like

Morocco is vey crucial to predict the future and decide what you plans should be; Moroccans economist

had worked to tighten the effect of the global recession and meltdown of economies. Furthermore, the

forecasting of the 2009 data was almost similar, because the trend of development was planned by the

Ministry to enhance the country economy. Despite a difficult international environment in which

international tourism declines averaging - 4%, the Moroccan tourism has maintained a steady

growth rate demonstrating its resilience to external economic shocks. Indeed, Morocco was the

only country in the Mediterranean in 2009 to exceed the 6% growth in terms of international

arrivals (Economy of Morocco, 2010).

Figure 5

Discussion

In the previous graph we will see the real data and the predicted data. In the graph we can notice a slide difference from the predicted and the real for the first two quarters; the real data shows a very slow progress in the GDP per capita for the first quarter, this is due, to the recovery of the recession that happened in 2008; whereas, the predicted data does not include any recession or unexpected

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phenomena. In fact, in the second quarter the real data had known a great growth against the predicted data, this is due to a boost in the economy of Morocco and a good season of agriculture along with a reasonable growth of tourists on the last two quarters.

Conclusion

The time series is a very good tool that helps us lay the data and understand its trend, the time

series enable us to modeling, forecasting, and simulating the data to better predict the future and

be able to get the best approach to use the country resources by efficiency. Furthermore, it can

help us understand the impact of other factors like recession, unpredicted disasters, and market

condition. The most important of analysing this data is to make the economists ready to make

good decision, in case of slowdown of the economy, the government can decide to reduce its

expenditure, or lower its taxes to generate more cash and business to invest, this known as

expenditure fiscal policy. On the opposite side, if the country like Morocco known a boost it will

try to reduce its purchase and higher the taxes to stop the country to go in a high inflation, this is

known with contractionary fiscal policy (Sexton, 2009).

Indeed the time series was a good tools and function to understand the evolution of the economy

of Morocco and in particular it’s GDP per capita, and how the trend has been growing through

the last 20 years. Furthermore, the time series allowed me to predict accurately data for the future

with a slide difference due the impact of the economy determinants. This study purpose is to

elaborate and calculate the data then predict the future, it’s a tools that has been used by many

other economist in particular. In general, the Time series is a material and subject that explore

the numbers and give a slide precision future, this subject is been taught in almost all other

science from economy to engineering.



Appendix

GDP (purchasing power parity)

This entry gives the gross domestic product (GDP) or value of all final goods and services

produced within a nation in a given year. A nation's GDP at purchasing power parity (PPP)

exchange rates is the sum value of all goods and services produced in the country valued at

prices prevailing in the United States. This is the measure most economists prefer when looking

at per-capita welfare and when comparing living conditions or use of resources across countries.

The measure is difficult to compute, as a US dollar value has to be assigned to all goods and

services in the country regardless of whether these goods and services have a direct equivalent in

the United States (for example, the value of an ox-cart or non-US military equipment); as a

result, PPP estimates for some countries are based on a small and sometimes different set of

goods and services. In addition, many countries do not formally participate in the World Bank's

PPP project that calculates these measures, so the resulting GDP estimates for these countries

may lack precision. For many developing countries, PPP-based GDP measures are multiples of

the official exchange rate (OER) measure. The differences between the OER- and PPP-

denominated GDP values for most of the wealthy industrialized countries are generally much

smaller.

The Economy growth by the King decision (CIA world factbook)

Economic policies pursued since 2003 by King Mohammed VI have brought macroeconomic stability to

the country with generally low inflation, improved financial sector performance, and steady progress in

developing the services and industrial sectors. The National Initiative for Human Development (INDH), a

$2 billion initiative launched by the King in 2005, has improved social welfare through a successful rural

electrification program, an overhaul of the tourism and agriculture sectors, and the gradual replacement

of urban slums with decent housing. Despite the INDH's success, Morocco continues to grapple with a

high illiteracy rate, a low education enrolment rate, and a high urban youth unemployment rate of

around 30%. Moroccan exports have dropped sharply since mid-2008 as a result of the decline in global

phosphates prices--the bulk of Moroccan exports by value--and the global economic slowdown. The

recession in Europe--Morocco's main export market--also prompted a decline in the flow of foreign

tourists and remittances, two primary sources of foreign currency. A record agricultural harvest, strong

government spending, and domestic consumption, however, combined to offset losses from weak

exports and helped GDP grow by 5.1% in 2009 (Africa-Morocco, 2010).

Regression Analysis

r² 0.389 n 32

r 0.624 k 1

https://www.cia.gov/library/publications/the-world-factbook/fields/2001.html?countryName=&countryCode=&regionCode=?



Std. Error 176.922 Dep. Var. GDP Per Capita

ANOVA table Source SS df MS F p-value

Regression 599,078.7920 1 599,078.7920 19.14 .0001 Residual 939,045.3906 30 31,301.5130

Total 1,538,124.1826 31

Regression output

confidence interval

variables coefficients std.

error t (df=30) p-value 95%

lower 95%

upper Intercept 710.8803 61.1133 11.632 1.21E-12 586.0703 835.6904 Year 14.8190 3.3874 4.375 .0001 7.9011 21.7369

Centered Moving Average and

Deseasonalization

Centered

Moving Ratio to Seasonal

GDP Per Capita

t Year Quarter GDP Per

Capita Average CMA Indexes Deseasonalized

1 2002 1 600.40

0.854 702.971

2 2002 2 660.50

0.910 725.770

3 2002 3 990.70 760.088 1.303 1.301 761.216

4 2002 4 750.50 779.763 0.962 0.934 803.214

5 2003 1 676.90 794.975 0.851 0.854 792.540

6 2003 2 741.40 802.963 0.923 0.910 814.664

7 2003 3 1,031.50 806.463 1.279 1.301 792.565

8 2003 4 773.60 808.150 0.957 0.934 827.936

9 2004 1 681.80 820.913 0.831 0.854 798.277

10 2004 2 750.00 842.425 0.890 0.910 824.114

11 2004 3 1,125.00 860.838 1.307 1.301 864.406

12 2004 4 852.20 878.413 0.970 0.934 912.057

13 2005 1 750.50 889.725 0.844 0.854 878.714

14 2005 2 821.90 892.738 0.921 0.910 903.119

15 2005 3 1,143.60 897.788 1.274 1.301 878.698

16 2005 4 857.70 902.501 0.950 0.934 917.943

17 2006 1 785.40 926.803 0.847 0.854 919.576

18 2006 2 824.71 966.253 0.854 0.910 906.207

19 2006 3 1,335.20 991.240 1.347 1.301 1,025.916

20 2006 4 981.70 1015.564 0.967 0.934 1,050.653

21 2007 1 861.30 1027.575 0.838 0.854 1,008.443

22 2007 2 943.40 1025.088 0.920 0.910 1,036.626

23 2007 3 1,312.60 1037.713 1.265 1.301 1,008.551



24 2007 4 984.40 1057.475 0.931 0.934 1,053.542

25 2008 1 959.60 1080.800 0.888 0.854 1,123.536

26 2008 2 1,003.20 1082.650 0.927 0.910 1,102.335

27 2008 3 1,439.40 1069.100 1.346 1.301 1,105.979

28 2008 4 872.40 1076.025 0.811 0.934 933.676

29 2009 1 963.20 1086.050 0.887 0.854 1,127.751

30 2009 2 1,055.00 1118.163 0.944 0.910 1,159.254

31 2009 3 1,467.80

1.301 1,127.801

32 2009 4 1,100.90 0.934 1,178.225

Calculation of Seasonal Indexes

1 2 3 4

2002 1.303 0.962 2003 0.851 0.923 1.279 0.957 2004 0.831 0.890 1.307 0.970 2005 0.844 0.921 1.274 0.950 2006 0.847 0.854 1.347 0.967 2007 0.838 0.920 1.265 0.931 2008 0.888 0.927 1.346 0.811 2009 0.887 0.944 mean: 0.855 0.911 1.303 0.936 4.005

adjusted: 0.854 0.910 1.301 0.934 4.000

Forecast 2009

Quarters Real Year

Predectied Year

2009

Q1 963.2 1123.9

Q2 1055 1055

Q3 1467.8 1153.34

Q4 1100.9 1168.02



Bibliography Africa-Morocco. (2010). Retrieved July 20, 2010, from Central Intelligence Agency:

https://www.cia.gov/library/publications/the-world-factbook/geos/mo.html

Economy of Morocco. (2010). Retrieved August 1, 2010, from www.maroc.ma:

http://www.maroc.ma/PortailInst/An/MenuGauche/Portrait+of+Morocco/Economy/Agriculture.htm

Indicat et aggregats. (2010). Retrieved July 15, 2010, from Haut-Commissariat au plan:

http://www.hcp.ma/

Sexton, f. a. (2009). Exploring Macroeconomics. Torontp.

The world Factbook-Morocco. (2010, July 27). Retrieved July 31, 2010, from central intelligent agency:

https://www.cia.gov/library/publications/the-world-factbook/geos/mo.html

Worldbank data. (2010). Retrieved July 29, 2010, from http://www.worldbank.org/:

http://search.worldbank.org/quickview?view_url=http%3A%2F%2Fdatabanksearch.worldbank.org%2FD

ataSearch%2FLoadReport.aspx%3Fdb%3D2%26cntrycode%3DMAR%26sercode%3DST.INT.ARVL%26yrco

de%3D

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GDP per capita of Morocco 2010 (time series)