Official reserve assets (AOR) increased by 39 billion dirhams (MMDH) compared to their level at the end of December 2019, making it possible to cover more than 7 months of imports, underlined, recently in Rabat, the Minister of Economy, Finance and Administrative Reform, Mohamed Benchaaboun.
Banks’ foreign exchange reserves have maintained an acceptable level of MAD 16 billion at the end of May 2020, explained Mr. Benchaaboun, in a presentation on the economic situation at the end of June and the outlook for the year 2020, during a joint meeting between the Finance and Economic Development Committee in the House of Representatives and the Finance, Planning and Economic Development Committee under the House of Advisors.
The minister noted “the absence of any pressure in the foreign exchange market and the stability of the exchange rate of the dirham around the reference rate without any intervention by Bank Al-Maghrib (BAM)”, reporting a decrease of exports from Moroccos global trades, like the automobile (-40.3%), aeronautics (-30.4%), strongly impacted following the closure of the global economy and its impact on international supply chains, reports MAP.
In addition, tax revenue fell by around 13 billion dirhams during the first half of 2020, a decrease of 10.5% compared to 2019, he said, forecasting a decrease of around 41 billion. MMDH of these receipts towards the end of the year.
Regarding bank loans, they increased by around 20 billion dirhams during the first five months of 2020, said Mr. Benchaaboun, highlighting the continuous improvement of the financing conditions of the national economy due to the stability of rates. debit interest rates in low levels despite the persisting liquidity deficit thanks to an adequate expansionary monetary policy.
He also stressed the 13% reduction in the Kingdom’s trade deficit, following the drop of 33 billion dirhams in exports, against a stronger decline in imports of 46.6 billion dirhams, adding that travel receipts and Transfers from Moroccans living abroad fell by 29%, which brought the rate of coverage of the trade deficit by these revenues to 57.6%.
And to continue that the current account of the balance of payments should register a decrease of 3.9% compared to 2019, to stand at around 8% of gross domestic product (GDP), under the impact, in particular of the decline export sectors including global trades, travel receipts and transfers from Moroccans.
Foreign Direct Investments (FDI), for their part, fell by 3.5 billion dirhams at the end of June 2020, noted the minister, noting that the income from these investments fell by 21.2% under the six first months of 2020, which is positive during this economic situation where Morocco enjoys great credibility with regard to foreign investments.
“Taking into account the indicators at the end of June, the budget deficit should reach 82.4 billion dirhams, or 7.5 of the gross domestic product, against an initial forecast of 3.5%,” said the minister.
On another note, Mr. Benchaaboun estimated that the crisis caused by the pandemic of the new coronavirus (Covid-19) will cause a more severe contraction of the world economy than the financial crisis of 2008, noting that the world economies should experience a slow recovery from the second half of this year with strong growth in 2021, and that GDP will not return to its 2019 level until 2022. In light of these developments, he argued, the macroeconomic framework will experience a “deterioration”, both compared to initial forecasts and last year, emphasizing that these forecasts depend heavily on the development of this crisis over the coming months. This framework will be updated in the light of these developments and future perspectives, ”the Minister concluded.