Is Morocco Emerging from the Crisis?
15 July 2008
Read by 1627 persons
Figures remain negative but are returning to less alarming levels than those recorded at the beginning of the year.
Activity is down in many sectors, capacity utilization remains low: 67%.
Credit to the economy maintains its upward trend.
Is Morocco finally starting to emerge from the crisis? During the first nine months of the year, the main indicators were certainly down compared to those recorded during the same period in 2008, but it is rather in the trend, less and less bearish, that one would tend to detect the improvement. In other words, in several sectors, the double-digit negative growth rates have been reduced to less alarming proportions. And insofar as the Moroccan economy is suffering the effects of the international crisis, mainly through the channel of foreign trade, it is interesting, first of all, to note that the current year should end on a less pronounced decline in world activity than expected: -1.1% instead of -1.4%, according to the latest forecasts of the International Monetary Fund (IMF). For 2010, growth would even be there and stronger than expected: 3.1% instead of only 2.5%, again according to the IMF figures revised last October.
But be careful, these averages hide significant differences between zones and between countries. Thus, the euro zone would end the 2009 financial year with a decline of 4.2% compared to only -2.7% in the United States and even a positive change of 6.2% in Asia. In 2010, this same Europe would see an improvement in its GDP of only 0.3% compared to 1.5% in the United States. And for France, Morocco's main partner, growth in 2009 would be -4%, and in 2010 GDP would increase by 0.9%.
All this to say that if some indicators of economic activity show improvements, that is to say, less and less significant declines, times are still difficult, if only because of the link between the Moroccan economy and Europe.
The forecasts developed within the framework of the 2010 Finance Bill also bear the mark of this caution: 3.5% growth, instead of 5.3% in 2009, the latest estimate retained after the 5.8% forecast established in the 2009 Finance Bill.
Non-agricultural activity returns to growth
What is the situation two months before the end of the current financial year? Thanks to an exceptional agricultural campaign (102 million quintals of cereals) and the "resistance" of non-agricultural activities, which should grow by 2.7% at the end of the year, economic growth can be considered quite strong given the context of the crisis in which it occurs. After almost stagnating at 0.6% growth at the end of the first quarter, non-agricultural activity recovered in the second quarter, recording a 2% increase, compared to 5% in the same period of 2008. The national accounts for the third quarter are not yet available, but nothing indicates a deterioration in activity, if we exclude from the analysis the particular situation of the month of September. The High Commission for Planning, in its latest economic outlook, even estimates that GDP for the third quarter would increase by 3.1% for non-agricultural activities. The slight recovery is mainly due to the construction sector (+1%), electricity (+2.7% at the end of August) and tourist arrivals (+13% at the end of September). Mining activities (phosphate production) and industrial activities are, however, down by 27.1% and 1.3% respectively. This evolution of the manufacturing sector is due in particular to the decline in production in the textile industries (3.1%), oil refining (18.3%), the machinery and equipment industry (16.1%), the wood industry (12.5%), the transport equipment industry (6.2%) and the automotive industry (4.9%). Bank Al Maghrib's business survey also reports a 6-point drop in the rate of capacity utilization at the end of August: 67% compared to 73% a year earlier.
However, according to the High Commission for Planning (HCP)'s business survey, business leaders are forecasting an improvement in industrial activity in the third quarter, particularly in the food and chemical-parachemical industries, which already performed relatively well in the second quarter.
This decline in non-agricultural activity, although less and less acute, is reflected in the financing of the economy: it is obviously growing, but this growth is not as strong as it was previously. Thus, over the first nine months of the year, mortgage loans recorded an additional outstanding amount of 15.3 billion DH, a surplus down from the 27 billion DH increase recorded at the end of the first nine months of 2008. Outstanding consumer credit, meanwhile, increased by 4.1 billion DH between January and the end of September 2009, compared to 4.7 billion DH over the same period in 2008. On the other hand, equipment loans, with an additional outstanding amount of 19.5 billion DH, performed better than last year over the same period (+10.6 billion DH).
These figures demonstrate the dynamism of domestic demand, particularly investment. Consumption also benefited from the effect of the increase in agricultural income, the reduction in income tax implemented on 1 January 2009 and the increase in civil servants' salaries, all in a context marked by moderate inflation: 1.5% between January and September compared to 3.9% a year earlier.
Except for fresh tomatoes and shoes, all exports are down
It is on the front of foreign trade that the difficulties are numerous and even structural, particularly concerning the trade balance. With the decline in foreign demand, exports of goods are down by 34% at the end of September: 83.6 billion DH compared to 126.6 billion DH over the first nine months of 2008, according to statistics from the Office des changes. Exports of services also fell by 9.8%, falling from 80.6 billion DH to 72.7 billion. Together, exports of goods and services fell by 24.6%. The deficit, therefore the deterioration of the coverage rate (70.5% instead of 75.3% in 2008, a decrease of 4.8 points), would have been much greater had it not been for the simultaneous decline in imports, due to the dual effect of the decline in raw material prices and the sluggishness of non-agricultural activity. Indeed, imports of goods fell by 23.4% (-59.2 billion DH) while imports of services increased slightly (+6% or +2.3 billion DH). But in total, imports of goods and services fell by 19.4% (-53.5 billion DH).
When we observe the evolution of exports of goods, product by product, we note that, with the exception of fresh tomatoes (+19.7%) and shoes (+7%), everything else is down; and these are significant declines reaching 70% for certain products. The same is true for imports, except for electricity (+29.5%), medicines (+18.8%), sugar (+72.5%) and crushing and agglomerating equipment (+14.4%).
As for services, the balance is certainly positive at 32.7 billion DH, but this surplus is down compared to the level recorded over the first nine months of 2008, which was 43 billion DH; this is due, as already indicated, to a 9.8% decline in revenue and a 6% increase in expenditure. This is due to the decline in tourism revenue by 8.8%, and transport revenue by 17.6%, while communication services generated a slightly higher revenue of 1.1% or +40.1 MDH, much less than that of call centers, which achieved an 11.1% increase.
Tax revenues down 10%, but the decline in ordinary expenditure cushions the shock
Very logically, in a crisis situation, everyone counts their pennies: not only do companies that restrict their purchases from the Moroccan market cut back on their communication spending or investments in this same market, but also Moroccans living abroad (MREs) who limit their remittances, undoubtedly affected by the effects of the crisis for a good part of them. Thus, MRE revenues fell, according to the Office des changes, by 9.7% at the end of September 2009, falling from 41.7 billion DH to 37.6 billion DH. Foreign private investments and loans, meanwhile, plummeted: -36% to 17.4 billion DH compared to 27.2 billion DH in September 2009.
Despite this negative note, we should remember the improvement in certain indicators which, from one quarter to the next, go from "bad" to "less bad". This is the case for MRE transfers, whose decline, after a downward phase that began in the third quarter of 2008 (-5.5%) and reached its lowest point at the end of the same year with -16.3%, is now less pronounced: -14.6% in the first quarter of 2009, -10.2% in the second quarter and -5.6% in the third (or -9.7% for the first nine months of the year). The same is true for tourism revenues, which are "only" -2.6% in the third quarter, after -6.1% in the second quarter and -21.6% in the first quarter (or -8.8% for all three quarters). This leads the Minister of Tourism, Mohamed Boussaid, to say that for the whole of 2009, the decline in tourism revenues should be between 5 and 6%.
However, whatever angle you choose to analyze these indicators from, you come back to one and the same reality: the current account deficit of the balance of payments continues to deteriorate: -9.2 billion DH in the first quarter, -14.8 billion DH in the second quarter, representing a deficit of 24 billion in the first half of 2009. Compared to the same semester of 2008, the deterioration of the deficit is 60.3%. With the reduction in the surplus of the capital and financial operations account, the balance of payments recorded a deficit of 11.7 billion DH in the first half of this year, compared to a surplus of 1.8 billion in June 2008.
The situation of public finances is hardly better. At the end of September, revenues fell by 7.4% to 135.5 billion DH compared to 146.3 billion during the same period in 2008. And this decline comes exclusively from the decline in tax revenues of 9.9% to 118.8 billion DH compared to 131.9 billion a year earlier. On the other hand, non-tax revenues increased by 18.5% to 14.8 billion DH compared to 12.5 billion in September 2008. However, despite the increase in investments of 22.9% to 33.6 billion DH, the decline in ordinary expenditure (-6.6% or -7.6 billion DH) due in particular to savings made under the heading of compensation, should help to limit the budget deficit. This is what the Minister of Finance is forecasting: -2.7% instead of -2.9% previously retained.
In total, we can say that, at the macroeconomic level, the indicators, placed in a context of crisis, are quite correct, in particular the level of growth, inflation and even the deficit, the reality is experienced differently by the operators. Many of them see their turnover shrinking drastically, and for them, no indicator can deny or deny it... So is the end of the crisis near or not?
Focus: Unemployment limited by construction and services
As predicted at the time of the announcement of the results of the labour market survey in the second quarter of this year, unemployment rose by almost 2 points in the third quarter: 9.8% compared to 8% in the second quarter. This level is almost the same as in the third quarter of 2008: 9.9%. By place of residence, unemployment fell in cities, standing at 14.8% compared to 15.5% a year earlier, but it increased in rural areas, rising from 3.9% to 4.3%. This configuration seems to be corroborated by the employment situation, since the 34,000 net jobs created are the result of the creation of 128,000 paid jobs (generally in cities) and the loss of 94,000 unpaid jobs (a practice specific to rural areas where family assistance constitutes the bulk of jobs created). This observation is further supported by the fact that the net jobs created were entirely in the construction and services sectors.
Salah Agueniou
Published on November 9, 2009
Posted online on November 10, 2009
lavieeco.com
Activity is down in many sectors, capacity utilization remains low: 67%.
Credit to the economy maintains its upward trend.
Is Morocco finally starting to emerge from the crisis? During the first nine months of the year, the main indicators were certainly down compared to those recorded during the same period in 2008, but it is rather in the trend, less and less bearish, that one would tend to detect the improvement. In other words, in several sectors, the double-digit negative growth rates have been reduced to less alarming proportions. And insofar as the Moroccan economy is suffering the effects of the international crisis, mainly through the channel of foreign trade, it is interesting, first of all, to note that the current year should end on a less pronounced decline in world activity than expected: -1.1% instead of -1.4%, according to the latest forecasts of the International Monetary Fund (IMF). For 2010, growth would even be there and stronger than expected: 3.1% instead of only 2.5%, again according to the IMF figures revised last October.
But be careful, these averages hide significant differences between zones and between countries. Thus, the euro zone would end the 2009 financial year with a decline of 4.2% compared to only -2.7% in the United States and even a positive change of 6.2% in Asia. In 2010, this same Europe would see an improvement in its GDP of only 0.3% compared to 1.5% in the United States. And for France, Morocco's main partner, growth in 2009 would be -4%, and in 2010 GDP would increase by 0.9%.
All this to say that if some indicators of economic activity show improvements, that is to say, less and less significant declines, times are still difficult, if only because of the link between the Moroccan economy and Europe.
The forecasts developed within the framework of the 2010 Finance Bill also bear the mark of this caution: 3.5% growth, instead of 5.3% in 2009, the latest estimate retained after the 5.8% forecast established in the 2009 Finance Bill.
Non-agricultural activity returns to growth
What is the situation two months before the end of the current financial year? Thanks to an exceptional agricultural campaign (102 million quintals of cereals) and the "resistance" of non-agricultural activities, which should grow by 2.7% at the end of the year, economic growth can be considered quite strong given the context of the crisis in which it occurs. After almost stagnating at 0.6% growth at the end of the first quarter, non-agricultural activity recovered in the second quarter, recording a 2% increase, compared to 5% in the same period of 2008. The national accounts for the third quarter are not yet available, but nothing indicates a deterioration in activity, if we exclude from the analysis the particular situation of the month of September. The High Commission for Planning, in its latest economic outlook, even estimates that GDP for the third quarter would increase by 3.1% for non-agricultural activities. The slight recovery is mainly due to the construction sector (+1%), electricity (+2.7% at the end of August) and tourist arrivals (+13% at the end of September). Mining activities (phosphate production) and industrial activities are, however, down by 27.1% and 1.3% respectively. This evolution of the manufacturing sector is due in particular to the decline in production in the textile industries (3.1%), oil refining (18.3%), the machinery and equipment industry (16.1%), the wood industry (12.5%), the transport equipment industry (6.2%) and the automotive industry (4.9%). Bank Al Maghrib's business survey also reports a 6-point drop in the rate of capacity utilization at the end of August: 67% compared to 73% a year earlier.
However, according to the High Commission for Planning (HCP)'s business survey, business leaders are forecasting an improvement in industrial activity in the third quarter, particularly in the food and chemical-parachemical industries, which already performed relatively well in the second quarter.
This decline in non-agricultural activity, although less and less acute, is reflected in the financing of the economy: it is obviously growing, but this growth is not as strong as it was previously. Thus, over the first nine months of the year, mortgage loans recorded an additional outstanding amount of 15.3 billion DH, a surplus down from the 27 billion DH increase recorded at the end of the first nine months of 2008. Outstanding consumer credit, meanwhile, increased by 4.1 billion DH between January and the end of September 2009, compared to 4.7 billion DH over the same period in 2008. On the other hand, equipment loans, with an additional outstanding amount of 19.5 billion DH, performed better than last year over the same period (+10.6 billion DH).
These figures demonstrate the dynamism of domestic demand, particularly investment. Consumption also benefited from the effect of the increase in agricultural income, the reduction in income tax implemented on 1 January 2009 and the increase in civil servants' salaries, all in a context marked by moderate inflation: 1.5% between January and September compared to 3.9% a year earlier.
Except for fresh tomatoes and shoes, all exports are down
It is on the front of foreign trade that the difficulties are numerous and even structural, particularly concerning the trade balance. With the decline in foreign demand, exports of goods are down by 34% at the end of September: 83.6 billion DH compared to 126.6 billion DH over the first nine months of 2008, according to statistics from the Office des changes. Exports of services also fell by 9.8%, falling from 80.6 billion DH to 72.7 billion. Together, exports of goods and services fell by 24.6%. The deficit, therefore the deterioration of the coverage rate (70.5% instead of 75.3% in 2008, a decrease of 4.8 points), would have been much greater had it not been for the simultaneous decline in imports, due to the dual effect of the decline in raw material prices and the sluggishness of non-agricultural activity. Indeed, imports of goods fell by 23.4% (-59.2 billion DH) while imports of services increased slightly (+6% or +2.3 billion DH). But in total, imports of goods and services fell by 19.4% (-53.5 billion DH).
When we observe the evolution of exports of goods, product by product, we note that, with the exception of fresh tomatoes (+19.7%) and shoes (+7%), everything else is down; and these are significant declines reaching 70% for certain products. The same is true for imports, except for electricity (+29.5%), medicines (+18.8%), sugar (+72.5%) and crushing and agglomerating equipment (+14.4%).
As for services, the balance is certainly positive at 32.7 billion DH, but this surplus is down compared to the level recorded over the first nine months of 2008, which was 43 billion DH; this is due, as already indicated, to a 9.8% decline in revenue and a 6% increase in expenditure. This is due to the decline in tourism revenue by 8.8%, and transport revenue by 17.6%, while communication services generated a slightly higher revenue of 1.1% or +40.1 MDH, much less than that of call centers, which achieved an 11.1% increase.
Tax revenues down 10%, but the decline in ordinary expenditure cushions the shock
Very logically, in a crisis situation, everyone counts their pennies: not only do companies that restrict their purchases from the Moroccan market cut back on their communication spending or investments in this same market, but also Moroccans living abroad (MREs) who limit their remittances, undoubtedly affected by the effects of the crisis for a good part of them. Thus, MRE revenues fell, according to the Office des changes, by 9.7% at the end of September 2009, falling from 41.7 billion DH to 37.6 billion DH. Foreign private investments and loans, meanwhile, plummeted: -36% to 17.4 billion DH compared to 27.2 billion DH in September 2009.
Despite this negative note, we should remember the improvement in certain indicators which, from one quarter to the next, go from "bad" to "less bad". This is the case for MRE transfers, whose decline, after a downward phase that began in the third quarter of 2008 (-5.5%) and reached its lowest point at the end of the same year with -16.3%, is now less pronounced: -14.6% in the first quarter of 2009, -10.2% in the second quarter and -5.6% in the third (or -9.7% for the first nine months of the year). The same is true for tourism revenues, which are "only" -2.6% in the third quarter, after -6.1% in the second quarter and -21.6% in the first quarter (or -8.8% for all three quarters). This leads the Minister of Tourism, Mohamed Boussaid, to say that for the whole of 2009, the decline in tourism revenues should be between 5 and 6%.
However, whatever angle you choose to analyze these indicators from, you come back to one and the same reality: the current account deficit of the balance of payments continues to deteriorate: -9.2 billion DH in the first quarter, -14.8 billion DH in the second quarter, representing a deficit of 24 billion in the first half of 2009. Compared to the same semester of 2008, the deterioration of the deficit is 60.3%. With the reduction in the surplus of the capital and financial operations account, the balance of payments recorded a deficit of 11.7 billion DH in the first half of this year, compared to a surplus of 1.8 billion in June 2008.
The situation of public finances is hardly better. At the end of September, revenues fell by 7.4% to 135.5 billion DH compared to 146.3 billion during the same period in 2008. And this decline comes exclusively from the decline in tax revenues of 9.9% to 118.8 billion DH compared to 131.9 billion a year earlier. On the other hand, non-tax revenues increased by 18.5% to 14.8 billion DH compared to 12.5 billion in September 2008. However, despite the increase in investments of 22.9% to 33.6 billion DH, the decline in ordinary expenditure (-6.6% or -7.6 billion DH) due in particular to savings made under the heading of compensation, should help to limit the budget deficit. This is what the Minister of Finance is forecasting: -2.7% instead of -2.9% previously retained.
In total, we can say that, at the macroeconomic level, the indicators, placed in a context of crisis, are quite correct, in particular the level of growth, inflation and even the deficit, the reality is experienced differently by the operators. Many of them see their turnover shrinking drastically, and for them, no indicator can deny or deny it... So is the end of the crisis near or not?
Focus: Unemployment limited by construction and services
As predicted at the time of the announcement of the results of the labour market survey in the second quarter of this year, unemployment rose by almost 2 points in the third quarter: 9.8% compared to 8% in the second quarter. This level is almost the same as in the third quarter of 2008: 9.9%. By place of residence, unemployment fell in cities, standing at 14.8% compared to 15.5% a year earlier, but it increased in rural areas, rising from 3.9% to 4.3%. This configuration seems to be corroborated by the employment situation, since the 34,000 net jobs created are the result of the creation of 128,000 paid jobs (generally in cities) and the loss of 94,000 unpaid jobs (a practice specific to rural areas where family assistance constitutes the bulk of jobs created). This observation is further supported by the fact that the net jobs created were entirely in the construction and services sectors.
Salah Agueniou
Published on November 9, 2009
Posted online on November 10, 2009
lavieeco.com
