Morocco 2013: Strong Growth with Large Deficits
18 February 2013
Read by 1616 persons
According to the latest statements from the High Commission for Planning and various information published by Bank Al Maghrib and the Ministry of Finance, the year 2013 will see a continuation of the deterioration of our economic indicators despite a significant improvement in GDP growth estimated between 4 and 5%.
To better characterize our economy today, we present estimates of the likely evolution of the trade deficit, the budget deficit, public debt, and our foreign exchange reserves.
Over 200 billion DH trade deficit
By the end of 2013, we expect a trade deficit of over 200 billion dirhams.
Indeed, the energy bill will not collapse in 2013: oil seems very stable, above 110 dollars a barrel, and nothing suggests a decline.
Despite a stabilization of our imports and exports, a slight increase in the trade deficit is to be expected, because to date the growth of our imports is still stronger than that of our exports.
Foreign reserves still under strong pressure
Despite the hope of receiving in 2013 a portion of the donations promised by the Gulf countries, this will not reduce the speed of deterioration of our foreign reserves, because the trade deficit remains a structural factor difficult to counteract in a single year.
The High Commission for Planning already sees foreign reserves reaching the level of 2.5 months of imports (goods and services), or a total amount of net reserves of 110 billion dirhams at the end of December 2013.
Budget management does not bode well for any improvement
Day-to-day budget management does not bode well for any improvement: indeed, no major progress in the search for savings in ordinary operating expenses has been put in place.
Government spending will surely continue at the same rate and the adjustments to the Compensation Fund will only be operational at best at the end of the year. At least, if the government manages to implement its reform.
-8.5% at the end of 2013
The budget deficit, which reached -7.1% of GDP in 2012, should therefore continue its trend to reach -8.5% in 2013.
Public debt
The State's financing needs have become significant, in the order of 70 billion dirhams per year, taking into account in particular the recurring budget deficit. The debt of the general treasury alone will reach 523 billion dirhams at the end of 2013, or 61% of GDP.
But of course, we still benefit from a benevolent view from international financial institutions, which do not take into account the debt of public institutions, debt which represents approximately 150 to 160 billion dirhams.
Sustained domestic consumption and FDI that does not abandon us
The Compensation Fund and employment in the public sector play an essential role in stimulating domestic consumption.
If we add to this the investment expenditure in the State budget and the parallel management of special accounts, this represents an injection of approximately 125 billion dirhams each year, or 15% of GDP.
This strong annual injection of funds from the State into our economy, coupled with approximately 20 billion dirhams of net foreign investment, allows the country to maintain its growth and continue to have the grace of international institutions.
Abdelhaq Sedrat.
Aufaitmaroc.com
Published on February 11, 2013.
Posted online on February 18, 2013.
To better characterize our economy today, we present estimates of the likely evolution of the trade deficit, the budget deficit, public debt, and our foreign exchange reserves.
Over 200 billion DH trade deficit
By the end of 2013, we expect a trade deficit of over 200 billion dirhams.
Indeed, the energy bill will not collapse in 2013: oil seems very stable, above 110 dollars a barrel, and nothing suggests a decline.
Despite a stabilization of our imports and exports, a slight increase in the trade deficit is to be expected, because to date the growth of our imports is still stronger than that of our exports.
Foreign reserves still under strong pressure
Despite the hope of receiving in 2013 a portion of the donations promised by the Gulf countries, this will not reduce the speed of deterioration of our foreign reserves, because the trade deficit remains a structural factor difficult to counteract in a single year.
The High Commission for Planning already sees foreign reserves reaching the level of 2.5 months of imports (goods and services), or a total amount of net reserves of 110 billion dirhams at the end of December 2013.
Budget management does not bode well for any improvement
Day-to-day budget management does not bode well for any improvement: indeed, no major progress in the search for savings in ordinary operating expenses has been put in place.
Government spending will surely continue at the same rate and the adjustments to the Compensation Fund will only be operational at best at the end of the year. At least, if the government manages to implement its reform.
-8.5% at the end of 2013
The budget deficit, which reached -7.1% of GDP in 2012, should therefore continue its trend to reach -8.5% in 2013.
Public debt
The State's financing needs have become significant, in the order of 70 billion dirhams per year, taking into account in particular the recurring budget deficit. The debt of the general treasury alone will reach 523 billion dirhams at the end of 2013, or 61% of GDP.
But of course, we still benefit from a benevolent view from international financial institutions, which do not take into account the debt of public institutions, debt which represents approximately 150 to 160 billion dirhams.
Sustained domestic consumption and FDI that does not abandon us
The Compensation Fund and employment in the public sector play an essential role in stimulating domestic consumption.
If we add to this the investment expenditure in the State budget and the parallel management of special accounts, this represents an injection of approximately 125 billion dirhams each year, or 15% of GDP.
This strong annual injection of funds from the State into our economy, coupled with approximately 20 billion dirhams of net foreign investment, allows the country to maintain its growth and continue to have the grace of international institutions.
Abdelhaq Sedrat.
Aufaitmaroc.com
Published on February 11, 2013.
Posted online on February 18, 2013.
