Growth revised upwards to 3.6% in 2018 thanks to the good performance of the non-agricultural sectors and a successful harvest : 19/07/2018

Growth revised upwards to 3.6% in 2018 thanks to the good performance of the non-agricultural sectors and a successful harvest

The Minister of Economy and Finance, Mr. Mohamed Boussaid, announced Thursday, July 19, 2018 at the Government Council in Rabat, the upward revision from 3,2% to 3,6 of growth forecasts for the year 2018, thanks to the good performance of non-agricultural sectors and a rich agricultural crop surpassing 100 million quintals.

M.Boussaid, who presented a report on the accomplishment record of the Finance Act (LF) for the year 2018 and the prospects for LF 2019, reviewed the main international and national economic indicators that showed a continuous improvement in the prospects of the global economic growth, especially with a revival of international trade.

This improvement, the Minister continued, remains threatened by protectionist conflicts, austerity monetary policies as well as volatile oil prices. At the national level, Mr. Boussaid underlined the significant acceleration in the growth of non-agricultural activities, thanks to the good performance of all sectors, except for public works.

The sea fishing and phosphate sectors thus recorded increases of 5.7% and 6.4% respectively during the first half of 2018, while the rate of the use of energy in production at the industrial level stood at 62.4%, he pointed, indicating that tourism experienced an increase of 11.8% in the number of tourists and 10.7% of overnight stays at the end of April 2018.

He added that bank credit, for its part, showed a slight increase of MAD 2.4 billion over five months, while inflation stood at 2.4%. Regarding employment, Mr. Boussaid, who quoted data published by the High Commissioner for Planning, reported the creation of 116,000 jobs with a slight decline in the unemployment rate from 10.7% to 10.5% between H1-2017 and H1-2018.

However, the unemployment rate remains high in urban areas with more than 15.6%, as well as among young people and graduates, which requires further efforts in terms of the priorities of the LF2019 project, he noted.

In addition, Mr. Boussaid pointed out that exports experienced a positive evolution of 11.4% to 140.2 billion dirhams (MMDH), while imports increased from 9.9% to 241 MMDH, noting that the trade deficit reached 100 MMDH.

He also indicated that the tourist receipts and the transfers of Moroccans residing abroad increased respectively from 15% to 31 MMDH and from 8.5% to 32 MMDH, while the foreign direct investments decreased from 15 MMDH in 2017 to 10 MMDH during the current year.

International reserves, on the other hand, are close to 5 months and 15 days, down compared to the end of December 2017, the Minister noted, estimating that the current account deficit of the balance of payments would be at 4% despite the increase in the energy bill.

In the light of these indicators, Mr. Boussaid presented the report of the implementation of LF2018 which showed an increase in tax revenues of 785 million dirhams (MDH), staff expenses (+53 MMDH) and expenses of the compensation fund at 8.2 MMDH, as well as a decrease in non-tax revenues of 1.9 MMDH.

As for public investment, the emission rate improved to reach 31.7 MMDH, contributing to the worsening of the deficit by 8 MMDH, which indicates the public effort made.

In this context, Mr. Boussaid noted that public finances have maintained their balances despite the constraints that marked the first half of this year, pointing out that an increase in the number of expenditures in management, retirement and social coverage (22 MMDH), as well as in the efforts deployed in favor of the development of southern provinces and programs to combat territorial disparities is predicted for the year 2019. It also includes efforts to promote integrated urban development programmes, social dialogue and other ongoing reform projects.

In this respect, he stressed the need to clearly define priorities in accordance with the High Royal Guidelines, the government programme and the guidelines to be adopted at the Council of Ministers.

According to the Minister, the LF2019 will focus mainly on certain priorities, including education, health, employment, social dialogue, pursuing major reforms and sectoral strategies to strengthen confidence and preserve macroeconomic balances in accordance with Article 77 of the Constitution.

Mr Boussaid also announced that in 2019, the principle of multiannual programming will enter into effect with the presentation of the prospects for the next three years of public finances.