2012 Finance Law: Growth, Deficit, Inflation…detailed overview in the framework letter.
12 September 2011
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The main points of the next budget in a document sent a week ago by the Prime Minister to the various departments.
In his framework letter sent to the various ministries a week ago, Prime Minister Abbas El Fassi outlined the contours and objectives of the 2012 Finance Law. He presents it as a solid basis for implementing the political and institutional reforms undertaken by the country since the entry into force of the new Constitution. In its preamble, the framework letter emphasizes the need to continue the momentum of development of the national economy and to protect its fundamentals, through the acceleration of job-creating growth. The head of government also calls for taking advantage of the Kingdom's geostrategic position to make it an investment and export base capable of attracting foreign capital. Deficit, growth, spending, priorities…detailed overview of the main lines of the 2012 Finance Law.
Fundamentals: 5% growth, 4% deficit and 2% inflation
In the objectives set by the head of government for the 2012 budget project, he foresees a growth rate of 5% with inflation contained at 2%. Also, Abbas El Fassi recommends reducing the balance of payments deficit by limiting the budget deficit to 4% of GDP and reducing the balance of payments deficit.
State spending: fewer cars, fewer buildings, fewer trips
The head of government called, in the context of developing proposals for the 2012 Finance Bill, to limit state spending. He therefore called on the various ministerial bodies to limit themselves to the budget items necessary for the normal operation of the administration and the strengthening of its efficiency. He also stressed that the government's lifestyle will be reviewed downwards by limiting spending related to the vehicle fleet and by rationalizing the purchase and rental of buildings. He also called for reducing telecoms costs by using alternative services and new technologies. The same applies to accommodation, catering and reception expenses, through the organization of conferences, missions abroad and a reduction in the number of representatives. But also, the cancellation of the programming of new buildings and service housing. And finally, the optimization of expenditure on studies by clearly defining their objectives and expected results.
Compensation fund: No more than 3% of GDP…Inchallah!
Regarding the subsidy of essential products, although currently compensation spending exceeds 5.5%, Abbas El Fassi calls for controlling spending below the 3% of GDP threshold for 2012. The framework letter also insists on the need to accelerate the reform of the compensation system to make it fairer and allow greater leeway for the investment budget. It will be noted, in passing, that this time the government has not been overly optimistic by taking as a working hypothesis a barrel at 100 dollars.
Priority I: Continuation of reforms and governance
This is firstly the implementation of institutional reforms and the enshrinement of the principles and mechanisms of good governance. In this context, in application of royal guidelines, the government is committed to implementing a Social Upgrading Fund, as well as an Interregional Solidarity Fund to strengthen the INDH programs.
Priority II: Intensive investment and employment
The second priority relates to consolidating sustainable economic development and employment through intensified public and private investment and the continued implementation of major structural projects, particularly in the areas of motorways, rail lines, ports, airports, industry, energy and mines. This momentum will improve the employability of young people and their integration into the world of work. The head of government recalls, in this sense, that the increase in salaries and the promotion of civil servants have cost an envelope of 13.2 billion dirhams, while price control via compensation has reduced inflation to 0.9%. He also promises to promote a new generation of sectoral agreements respecting regional economic specificities. This will help to expand employment opportunities in the agri-food, medical industry, services, automotive assembly, media, cinema and many other sectors.
Priority III: Sectoral strategies
Thirdly, this concerns the continuation of structural and sectoral reforms and the implementation of sectoral strategies to improve the attractiveness of the national economy and the efficiency and competitiveness of the national productive fabric in order to meet the challenge of the national economic situation. To achieve this, Abbas El Fassi insists on the reform of justice and its independence in harmony with the new Constitution. The business climate is also called upon to improve, as is the implementation of sectoral strategies, in order to modernize the production process.
Priority IV: More solidarity…
Finally, the fourth priority concerns strengthening the cohesion of Moroccan society by focusing on the sectors of education, training, health, access to social housing by continuing, among other things, the implementation of the “Cities without slums” programs and the fight against substandard housing, as well as the conduct of rural development. In addition to this, the government is committed to strengthening solidarity mechanisms for the benefit of needy populations through the creation of a Solidarity Fund. These measures are likely to improve the implementation of the programs of the second phase of the INDH. The objective is to expand the Initiative's intervention to 701 rural communes and 530 urban communes, as well as territorial upgrading for the benefit of 22 provinces suffering from enclavement.
Dounia Mounadi.
Published on September 9, 2011.
Posted online on September 12, 2011.
Aujourdhui.ma
In his framework letter sent to the various ministries a week ago, Prime Minister Abbas El Fassi outlined the contours and objectives of the 2012 Finance Law. He presents it as a solid basis for implementing the political and institutional reforms undertaken by the country since the entry into force of the new Constitution. In its preamble, the framework letter emphasizes the need to continue the momentum of development of the national economy and to protect its fundamentals, through the acceleration of job-creating growth. The head of government also calls for taking advantage of the Kingdom's geostrategic position to make it an investment and export base capable of attracting foreign capital. Deficit, growth, spending, priorities…detailed overview of the main lines of the 2012 Finance Law.
Fundamentals: 5% growth, 4% deficit and 2% inflation
In the objectives set by the head of government for the 2012 budget project, he foresees a growth rate of 5% with inflation contained at 2%. Also, Abbas El Fassi recommends reducing the balance of payments deficit by limiting the budget deficit to 4% of GDP and reducing the balance of payments deficit.
State spending: fewer cars, fewer buildings, fewer trips
The head of government called, in the context of developing proposals for the 2012 Finance Bill, to limit state spending. He therefore called on the various ministerial bodies to limit themselves to the budget items necessary for the normal operation of the administration and the strengthening of its efficiency. He also stressed that the government's lifestyle will be reviewed downwards by limiting spending related to the vehicle fleet and by rationalizing the purchase and rental of buildings. He also called for reducing telecoms costs by using alternative services and new technologies. The same applies to accommodation, catering and reception expenses, through the organization of conferences, missions abroad and a reduction in the number of representatives. But also, the cancellation of the programming of new buildings and service housing. And finally, the optimization of expenditure on studies by clearly defining their objectives and expected results.
Compensation fund: No more than 3% of GDP…Inchallah!
Regarding the subsidy of essential products, although currently compensation spending exceeds 5.5%, Abbas El Fassi calls for controlling spending below the 3% of GDP threshold for 2012. The framework letter also insists on the need to accelerate the reform of the compensation system to make it fairer and allow greater leeway for the investment budget. It will be noted, in passing, that this time the government has not been overly optimistic by taking as a working hypothesis a barrel at 100 dollars.
Priority I: Continuation of reforms and governance
This is firstly the implementation of institutional reforms and the enshrinement of the principles and mechanisms of good governance. In this context, in application of royal guidelines, the government is committed to implementing a Social Upgrading Fund, as well as an Interregional Solidarity Fund to strengthen the INDH programs.
Priority II: Intensive investment and employment
The second priority relates to consolidating sustainable economic development and employment through intensified public and private investment and the continued implementation of major structural projects, particularly in the areas of motorways, rail lines, ports, airports, industry, energy and mines. This momentum will improve the employability of young people and their integration into the world of work. The head of government recalls, in this sense, that the increase in salaries and the promotion of civil servants have cost an envelope of 13.2 billion dirhams, while price control via compensation has reduced inflation to 0.9%. He also promises to promote a new generation of sectoral agreements respecting regional economic specificities. This will help to expand employment opportunities in the agri-food, medical industry, services, automotive assembly, media, cinema and many other sectors.
Priority III: Sectoral strategies
Thirdly, this concerns the continuation of structural and sectoral reforms and the implementation of sectoral strategies to improve the attractiveness of the national economy and the efficiency and competitiveness of the national productive fabric in order to meet the challenge of the national economic situation. To achieve this, Abbas El Fassi insists on the reform of justice and its independence in harmony with the new Constitution. The business climate is also called upon to improve, as is the implementation of sectoral strategies, in order to modernize the production process.
Priority IV: More solidarity…
Finally, the fourth priority concerns strengthening the cohesion of Moroccan society by focusing on the sectors of education, training, health, access to social housing by continuing, among other things, the implementation of the “Cities without slums” programs and the fight against substandard housing, as well as the conduct of rural development. In addition to this, the government is committed to strengthening solidarity mechanisms for the benefit of needy populations through the creation of a Solidarity Fund. These measures are likely to improve the implementation of the programs of the second phase of the INDH. The objective is to expand the Initiative's intervention to 701 rural communes and 530 urban communes, as well as territorial upgrading for the benefit of 22 provinces suffering from enclavement.
Dounia Mounadi.
Published on September 9, 2011.
Posted online on September 12, 2011.
Aujourdhui.ma
