tuesday, july 14, 2020 at 2:49 p.m.
Casablanca – Here are the main points of the 2021 exploratory economic budget drawn up by the High Commission for Planning (HCP) in an unprecedented context marked by the health crisis caused by Covid-19:
– The Gross Domestic Product (GDP) should, taking into account a forecast decrease of 9% in taxes and levies on products net of subsidies, record a decrease of 5.8% in 2020 instead of an increase of 2.5 % recorded in 2019.
– The national economy should experience a recession in 2020, the first in more than two decades, under the combined effect of drought and the pandemic. The primary sector would generate value added down 5.7% in 2020 after having decreased by 4.6% in 2019.
– Non-agricultural activities should experience a sharp decline, of 5.3% in 2020 after an increase of 3.7% the previous year. As for the secondary sector, it should record a decline of almost 6.9% in 2020 after an increase of 3.6% in 2019.
– The activities of the tertiary sector should drop by 4.5% after an increase of 3.8% in 2019. The tourism and transport sectors, strongly impacted by the closure of the borders and the measures taken to contain the pandemic , would be the most affected.
– Regarding the development of domestic prices, the fall in commodity prices, combined with a drop in demand, should lead to a fall in the general price level which would be around -0.4% instead of a 1.3% increase the previous year.
– The unemployment rate should reach nearly 14.8%, an increase of 5.6 points compared to the level recorded in 2019.
– Domestic demand is expected to decrease by 4% in 2020, its contribution to growth would thus be negative by 4.4 points instead of a positive contribution of 1.9 points in 2019.
– Similarly, the contribution of external demand to growth would be negative by 1.4 points, after having been positive by 0.6 points the previous year.
– Domestic savings, which was around 23.3% of GDP in 2019, should drop to 19.1% of GDP in 2020.
– The budget deficit should widen in 2020 to reach almost 7.4% of GDP, far exceeding the level reached on average annually between 2011 and 2013, i.e. 6.1% of GDP.
– To cover these needs, Morocco would resort to external borrowing, exceeding the ceiling of external financing fixed by the 2020 finance law at 31 MMDH. These conditions should bring the stock of overall treasury debt to 74.4% of GDP in 2020.
– The money market should suffer the effects of the fall in net financial flows. This should lead to a decline in foreign currency stocks in 2020 to nearly 212 MMDH (not including the use of the IMF’s $ 3 billion Liquidity Precautionary Line).
– The primary sector should experience an increase of around 9.1% in 2021 instead of a decrease of 5.7% expected in 2020.
– Non-agricultural activities should register a moderate growth rate of around 3.6% in 2021 instead of a decrease of 5.3% in 2020.
– GDP should record growth of 4.4% in 2021 after a decline of 5.8% expected in 2020. In nominal terms, GDP should record growth of 5.6% in 2021.
– Economic growth should be supported in 2021 by the recovery of domestic demand contributing 4.8 points to economic growth, while the contribution of external demand should remain negative with -0.4 point improvement compared to -1.4 point in 2020.
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