Morocco’s Economy Hit as Remittances from Abroad Plummet, Impacting National Savings

According to the figures published by the High Commission for Planning in the context of the exploratory budget, the indicators are in the red due to the health crisis related to Covid-19. As a result, a 19.1% drop in domestic savings (vs. 23.3% in 2019) is observed in the context of financing the economy, the cornerstone of the recovery.

National savings, already with a rate oscillating around 22% due to its low level compared to investment of around 32%, has always been on the accused bench. Even before the crisis related to Covid-19, it remained low.

According to the HCP, this decline could further accentuate in 2020 due to net income from the rest of the world. They could continue to fall, showing a 4.6% drop after -1.5% in 2019 and -16.9% in 2018. For analysts, this progress should result in a decrease in national savings to reach 23.7% of GDP instead of 27.8% in 2019.

Given the current state of savings, financing such a level of investment would be so difficult unless resorting to debt, warns the same source. The HCP also recommends that financial operators innovate and design products adapted to the needs of the population.