Anticipating Economic Recessions in Morocco Using the Interest Rate Differential and Leading Indicators: An Empirical Analysis with a Probit Model

This paper examines the predictive ability of SPREAD of interest rates and leading indicators in forecasting a future economic recession in Morocco. The study is based on quarterly data from 2007Q1 to 2023Q4 and evaluates four distinct scenarios: individual analysis of leading indicators, adding SPREAD to individual indicators, evaluating indicators with their lags, and adding SPREAD to indicators and their lags. The results of the study show that incorporating SPREAD helps to explain and anticipate medium and long-term fluctuations in the economic recession. In addition, the unemployment rate proves to be a reliable indicator for forecasting short, medium and long-term economic recessions. This study highlights the importance of SPREAD rates as a key indicator in forecasting economic recessions in Morocco, and its potential for strengthening forecasting models in combination with other leading indicators.