Eleventh meeting of the Economic Monitoring Committee : 06/01/2021

Eleventh meeting of the Economic Monitoring Committee

The Economic Monitoring Committee (CVE) held, on Wednesday 6 January 2021, its 11th meeting. This meeting was devoted to the following points :

​1.    Assessment of the national economic and financial situation.
2.    Extension and improvement of "Damane Relance" guarantee offer.
3.    Adoption of amendments to program contracts of the tourism sector, event organization and catering sector and amusement parks and games sector, to prolong support measures dedicated to them.
4.    Signature of five new program contracts: restaurant owners, press, cultural and creative industries, private gyms and nurseries

1. Assessment of the national economic and financial situation

A review of recent developments in certain key economic indicators shows that the national economic activity is continuing its gradual recovery (mitigation in the quarterly GDP contraction by 8pts between Q2 and Q3, reduction of the trade deficit by 26%, official assets of reserve covering more than 7 months of imports of goods and services, etc.) with the exception of certain sectors which are still struggling to return to recovery, such as tourism, air transport and certain tertiary activities. In terms of public finances, the results at the end of November show a behavior of revenue and expenditure generally in line with forecasts. The budget deficit for 2020 is expected to settle at 7.5%, as provided for in the Amending Finance Law. 

2. "Damane Relance" guarantee offer

The members of the CVE expressed their satisfaction with the progress made in terms of the various guarantee mechanisms put in place to fight against the repercussions of the crisis, in this case, Oxygen and Recovery instruments and those deployed in favor of establishments and businesses. In fact, as of December 31, 2020, 86,008 credit operations had been carried out.

In order to ensure the conditions for better support for the economic recovery, the CVE has decided to prolong the deadline for granting relaunch credits to March 31, 2021 and to introduce flexible and improvement measures of the terms of use of this offer. These measures relate in particular to the following aspects:

Expansion of the Relance offer to insurance brokers, exchange bureaus and money transfer companies; - Increase in the amount of the stimulus credit to 2 months of turnover for tourist transport companies affected by the crisis; - easing of conditions for construction companies, in particular the restatement of advances on accrued rights and the case-by-case investigation of viable companies affected by the crisis, less than 3 years old having made significant investments before the crisis and showing a high debt ratio; - Increase in the ceiling of the amount of the recovery loan from 40% to 50% of the overall cost of carrying out the project, excluding land, for real estate development companies that do not benefit from CPI (property development credit).

3. Support measures to the tourism sector, event organizations and catering sector, and amusement parks sector

In view of the persistence of the negative effects of the crisis on certain sensitive sectors, the CVE has decided to extend the support measures dedicated to them until March 31, 2021, in particular, the granting of the monthly fixed allowance of 2,000 dirhams for CNSS affiliates, in order to preserve jobs. In this regard, an amendment to the program contract for the revival of the tourism sector was signed. This aims, among other things, to take charge of employees and trainees under employment contract of temporary employment agencies having contracts with classified tourist accommodation establishments, travel agencies and tourist transport companies concluded before February 2020. For these employees, the compensation will cover the period from October 1, 2020 to March 31, 2021. 

This amendment also includes tourist transport sector specific provisions which stipulate that: - The condition of the obligation to have the opinion of the National Transport Commission before resuming the operation of tourist transport authorizations that have not been used for more than one year will not be applied during the year 2021. - Vehicles having obtained their operating authorizations before the signing of the amendment benefit from an additional operating period of one year.

This last measure should allow operators of tourist transport and rental companies of vehicles without driver, to postpone the maturities of loans contracted with banks and finance companies.

It was also decided to extend the program contracts relating to the events and catering sector and that of amusement parks and games until March 31, 2021.

4. New Program Contracts

Likewise, four new program contracts were concluded, covering the press sector, cultural and creative industries, private gyms and nurseries. These program contracts include support measures of a social and economic nature aimed at preserving employment and supporting entrepreneurial activity in these sectors.

Finally, a program contract was signed to support restaurant owners, affiliated with the CNSS, who are affected by the decisions taken to contain the spread of the pandemic. Its entry into force takes effect from January 1, 2021.