The Minister of Economy and Finance expects the national economy to register a growth of 4.8% in 2017 : 27/07/2017

The Minister of Economy and Finance expects the national economy to register a growth of 4.8% in 2017

During the Government Council held on Thursday 27 July 2017 under the chairmanship of the Head of Government, Mr. Mohammed BOUSSAID, Minister of Economy and Finance, gave an overview of the implementation of 2017 budget and the general framework for preparing the draft finance act 2018.

According to Mr. BOUSSAID, the national economy is expected to achieve a growth of 4.8% in 2017 against 1.2% in 2016 which was marked by the most severe draught since more than 30 years.

The Minister emphasized that 102 million quintals of cereals have been harvested during this year, against only 30 million quintals last year. Regarding the budgetary deficit, it is expected to be revised downwards, moving from 4.1% the last year to 3.5% this year, said the Minister, specifying that the deficit of the GDP current account is expected to decrease to 4% this year, after 4.4% last year.

Regarding inflation, it achieved 0.9% during the first six months of the year, said Mr. BOUSSAID, highlighting an increase of foreign investments incomes that reached MAD 17.7 billion.

Concerning external assets, the Minister said that they registered a negative decrease by moving from 6 months and 25 days last year to 6 months and 3 days only in June 2017.

There is an acceleration of the economic growth rate in 2017 due to the improvement of the added value of agricultural sector as a result of the last harvests, besides the maintenance by non-agricultural sectors of the same growth rate, said the Minister, deeming the performance of non-agricultural sectors as “satisfactory”.

Accordingly, the production of phosphate increased by 26% and that of its derivatives by 35%, the Minister added, specifying that the index of industrial production registered an increase of 2.3%, while the index of net production of energy increased by 5.2%, and that of tourism by 8.7% at the level of arrivals and 16.7% at the level of nights. Regarding the index of cement consumption, the Minister added that it decreased by 9.2%.

With regard to unemployment, the Council has focused on three indexes raised by the Minister who explained that while the unemployment rate is 10.7% nationally, it is close to 15.7% at the urban level, 20.7% at the level for graduates and 23.2% for youth, pointing out that these challenges require an increase in efforts to meet expectations. Similarly, the Minister revealed that the trade deficit increased by 8.2% because of the increase of energy bill as oil prices rose by 29% at the global level, adding that at the level of exports, they registered a positive evolution of 6.6%.

The presentation also concerned several data on the dynamism of exports. In this context, the automobile industry rose by 2.9% to reach MAD 29.9 billion in 2017, a figure that doubled in four years. The textile and leather sector also increased by 1.6%, i.e. MAD 18 billion, agri-food by MAD 14.9 billion (6.5%), and aeronautics by MAD 5.1 billion, with an increase of 11.2%.

At the level of international economy, the Minister of Economy and Finance revealed that some indexes allow expecting an increase in 2017, particularly at the level of Euro zone which is expected to witness an increase of about 1.9% as well as the challenges related to the gradual abandonment of interventionist monetary policy in the USA and the exit of Great Britain from the EU, taking into account the economic weight of this country in the EU (more than 17% of GDP).

The Minister also mentioned the emergence of protectionist conflicts in the economic policies of many countries, as well as the problems related to tensions in the Middle East and their impact of the economies of other countries.

At the level of implementing the Finance Act 2017, Mr. BOUSSAID focused on the improvement of tax revenues by 8.3%, particularly at the level of income tax and corporate tax, pointing out a decrease of non-tax revenues and the issuance of more than 53.3% of investment expenses.

Compensation expenses also increased by MAD 2.7 billion, he said, while debt interests decreased, showing that the treasury debt index remains stable at 64.4% of GDP.

Regarding the preparation of the Finance Act 2018, the presentation raised the particular social context marked by the increase of constant social demands and the need to meet them, the context of the country’s foreign policy towards Africa, as well as the necessity of assimilating the evolutions of the international economic situation, calling the Government to take into account these points while drawing up the draft finance act.

In this regard, the Government Council decided to dedicate a meeting, shortly, to the examination of the Finance Act 2018.

The Minister also recalled several commitments relating to urban development conventions, the implementation of the sectoral social and economic strategy, the development model of the southern provinces as well as the program to combat sectoral disparities, besides the need to pursue major reforms and implement advanced regionalization.