Morocco’s Finance Minister Reports 20% Drop in FDI, Remains Optimistic on Economic Outlook

Regarding the 20% drop in FDI in 2020, to 13 billion dirhams, the minister believes that this is an encouraging result, reports Telquel. "We can be pleased with this, it proves that Morocco remains attractive. Despite the context, commercial banks have not had to use BAM’s reserves, which remain positive at 16 billion dirhams".

In response to the 5% drop in ordinary revenue, from 121 billion dirhams to 108 billion dirhams, i.e. 13 billion dirhams excluding inflation and a 9 billion dirhams drop in tax revenue, the government has planned a 43 billion dirhams drop in state revenue by the end of 2020. Despite the various losses suffered by the state, the resumption of activities has boosted state revenues with a regression of VAT which, after falling by 3 billion dirhams, "is gradually recovering".

As for registration fees, they fell by 6 billion dirhams to June 2020, due in particular to the prolonged halt in the real estate sector. As for current expenditure, it has increased by 7% compared to 2019. "This comes from the provisions of the social dialogue, and part of the retirement pensions. We plan a deficit of 82 billion dirhams, or 7.5% of GDP, by the end of the year," he adds.

Speaking about the macroeconomic framework, the minister indicates that Morocco was forecasting a growth of 2.3%. "We will be less than 5%, so a rate of -8.2% compared to forecasts. This is what is leading experts to now rule out generalized containment scenarios tomorrow". For the minister, containment will now be local and targeted in the future, and will have to be accompanied by a system of screening, isolation and care. According to him, containment will no longer take place on a national scale, as the consequences are too heavy, including health-wise, since those suffering from other pathologies do not have access to care.

Following the decline of all indicators compared to forecasts, the minister argues that the evolution of this framework is subject to several question marks related to the evolution of the pandemic in Morocco and beyond its borders. For Mohamed Benchaâboun, the reopening of borders could impact tourism and all activities related to human gatherings: events, conferences, festivals, etc. However, he calls for caution, as some countries are reopening their borders and may reverse their decisions if the pandemic context dictates it.