Morocco's Growth Revised Downward
24 December 2008
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Title: Morocco's Growth Revised Downward Both public and private, national and international forecasting centers have revised global growth downwards. In this context, and despite having resources, the national economy would certainly not be spared from this shockwave. The repercussions of the financial crisis on economic performance will be felt in one way or another within the internal structure.
Morocco's external environment is now more difficult than it was in 2008. While the financial sector remains sheltered from these turbulences due to the solidity of the banking sector and the low degree of integration of the financial market internationally, the risks of contamination could spread via some channels of the real economy in relation to the evolution of the situation in the main partner countries. These repercussions would be mainly recorded in tourism, remittances from Moroccans living abroad (MREs), foreign direct investment, and foreign demand addressed to Morocco.
Certainly, in this particularly pernicious context, the Moroccan economy would manage to resist if it is quick to rely on structurally sound budgetary and economic policies. For the next fiscal year, the budget configuration sets as its main objective the creation of more favorable conditions for growth through increased investment efforts, support for purchasing power, and improvement of living conditions. The budgetary resources allocated to the implementation of the actions envisaged within the framework of this objective are relatively significant.
In its latest monthly letter, the Moroccan Conjuncture Center estimates, in essence, that the 2009 budget bill comes in an international context marked by the worsening of the financial crisis, which is in the process of transforming into a generalized recession affecting all economies, both developed and emerging. Despite an unfavorable international environment, economic activity in Morocco would continue its dynamism in 2009, it was possible to read in the note accompanying the draft 2009 Finance Act. GDP in volume would increase by 5.8%, supported by the favorable effects of reforms, notably structural reforms undertaken in recent years. Internally, the level of the 2009 agricultural campaign retained is 60 million quintals, following the consolidation of production from other crops and livestock, as well as fishing. National economic activity should also benefit from the continuation of sectoral and structural reforms, with a view to creating the conditions for better integration into the global economy.
Furthermore, the positive impacts of the operationalization of sectoral policies and the cumulative effects of the budgetary and fiscal policy measures adopted in previous years and those proposed within the framework of the 2009 Finance Act draft would be able to stimulate domestic demand and boost national economic activity.
The least we can say is that it was recently anticipated that the prospects for the evolution of the national economy in 2009 remain well-oriented, benefiting from the strong progress in public investment, the improvement in purchasing power and the recovery of consumption, the promotion of exports, the diversification of growth sources through the strengthening of current sectoral policies and the implementation of new sectoral policies (agriculture, water, energy, etc.), as well as the improvement of the business environment.
However, for the CMC, the consolidation of the various expected effects of the budget programming for the year 2009, taking into account the dynamics of household and business behavior, leads to an overall effect on activity reaching 4% of GDP expressed in nominal values. At the beginning of last summer and having retained the hypothesis of a stable international environment and an average agricultural campaign, this observatory had forecast for the national economy an evolution at a rate of 4.7% in 2009. The financial crisis will have negative effects on trade, demand generated by tourism activities, remittances from MREs, and inflows of direct investment, much more than on purely financial flows.
Abdelali Boukhalef
Posted online December 24, 2008
yabiladi.com
Morocco's external environment is now more difficult than it was in 2008. While the financial sector remains sheltered from these turbulences due to the solidity of the banking sector and the low degree of integration of the financial market internationally, the risks of contamination could spread via some channels of the real economy in relation to the evolution of the situation in the main partner countries. These repercussions would be mainly recorded in tourism, remittances from Moroccans living abroad (MREs), foreign direct investment, and foreign demand addressed to Morocco.
Certainly, in this particularly pernicious context, the Moroccan economy would manage to resist if it is quick to rely on structurally sound budgetary and economic policies. For the next fiscal year, the budget configuration sets as its main objective the creation of more favorable conditions for growth through increased investment efforts, support for purchasing power, and improvement of living conditions. The budgetary resources allocated to the implementation of the actions envisaged within the framework of this objective are relatively significant.
In its latest monthly letter, the Moroccan Conjuncture Center estimates, in essence, that the 2009 budget bill comes in an international context marked by the worsening of the financial crisis, which is in the process of transforming into a generalized recession affecting all economies, both developed and emerging. Despite an unfavorable international environment, economic activity in Morocco would continue its dynamism in 2009, it was possible to read in the note accompanying the draft 2009 Finance Act. GDP in volume would increase by 5.8%, supported by the favorable effects of reforms, notably structural reforms undertaken in recent years. Internally, the level of the 2009 agricultural campaign retained is 60 million quintals, following the consolidation of production from other crops and livestock, as well as fishing. National economic activity should also benefit from the continuation of sectoral and structural reforms, with a view to creating the conditions for better integration into the global economy.
Furthermore, the positive impacts of the operationalization of sectoral policies and the cumulative effects of the budgetary and fiscal policy measures adopted in previous years and those proposed within the framework of the 2009 Finance Act draft would be able to stimulate domestic demand and boost national economic activity.
The least we can say is that it was recently anticipated that the prospects for the evolution of the national economy in 2009 remain well-oriented, benefiting from the strong progress in public investment, the improvement in purchasing power and the recovery of consumption, the promotion of exports, the diversification of growth sources through the strengthening of current sectoral policies and the implementation of new sectoral policies (agriculture, water, energy, etc.), as well as the improvement of the business environment.
However, for the CMC, the consolidation of the various expected effects of the budget programming for the year 2009, taking into account the dynamics of household and business behavior, leads to an overall effect on activity reaching 4% of GDP expressed in nominal values. At the beginning of last summer and having retained the hypothesis of a stable international environment and an average agricultural campaign, this observatory had forecast for the national economy an evolution at a rate of 4.7% in 2009. The financial crisis will have negative effects on trade, demand generated by tourism activities, remittances from MREs, and inflows of direct investment, much more than on purely financial flows.
Abdelali Boukhalef
Posted online December 24, 2008
yabiladi.com
