Morocco: The Impressive Figures of Bank Loans Driven by Major Projects

Monetary activity in Morocco is showing an acceleration at the end of the year. Bank Al-Maghrib revealed in its latest note on monetary statistics that financing to the public sector has increased by 10.9%, while the private sector is recording a more modest growth of 3.9%. This overall trend is based on an exceptional 56.8% increase in loans to local authorities, a surge directly linked to the financing of major national projects such as the extension of the high-speed rail line and seawater desalination units.

The breakdown by economic purpose shows particular vitality in equipment loans, which are soaring by 20.4% compared to 16.2% previously. Real estate loans and consumer loans are also following this upward trend with respective increases of 3.4% and 5%. In contrast, cash facilities continue to contract, with a worsening decline of 4.9%. On the risk front, the national institution notes a stabilization of the share of non-performing loans around 8% of total loans, marking a slowdown in their annual growth to 3.1%.

In parallel, the money supply (M3) reached 2,069.8 billion dirhams at the end of December, showing an annual growth of 9.4%. This increase is mainly driven by the acceleration of bank loans and a strong 18% increase in official reserve assets. Within the M3 components, currency in circulation stands out with a rapid acceleration of 18.5%, contrasting with the slowdown in sight deposits and the worsening decline in term deposits, which fell by 4.7%.

This monetary configuration also reflects a slowdown in the assets of households and private non-financial companies, whose growth in sight deposits and money market UCITS is stagnating. The central government, on the other hand, sees its net claims on deposit institutions remain stable at 6.3%, confirming a maintained balance despite the importance of financing needs for basic infrastructure.