Mr. Zouhair CHORFI, Director of Treasury and External Finance, gave a national press conference on March 16th, 2009.
Mr. CHORFI provided information on the execution process of the 2009 finance act, the main economic results of 2008 and the treasury financing.
Overview on trends of the 2008 economic and financial climate:
In his press conference, Mr. CHORFI focused on the economic indicators for the year 2008, which he qualified as good, despite two successive international crises; i.e., the raw material crisis and the financial crisis. He underlined that in an adverse context marked by a sharp rise in raw material prices and the emergence of a deep financial crisis worldwide, the Moroccan economy maintained its solid growth pace in 2008, with major equilibriums consolidated at the macro-economic level, despite a rising deficit in the balance of payments` current account.
According to the Director of Treasury and External Finance, reforms launched during the past decade, along with ongoing structuring projects, meant that local demand, and particularly investment, played a major role in the creation of wealth. The upward trend in investment has been maintained through favourable financing conditions, both at the level of interest rates and volume granted by banks.
This economic dynamic resulted in a significant increase in fiscal revenues, enabling our country to make a surplus in the last two years, and significantly reduce treasury debts, which fell to around 48% of GDP against 53.6% in 2007. Mr. CHORFI added that this surplus was achieved despite the significant increase in the compensation fund charges due to a rise in oil prices. Oil prices increased our energy bill to MAD 70 billion, causing to a larger extent, the degradation of the balance of payments.
In his presentation, Mr. CHORFI further elaborated on this trend, which can be summarized in the following points:
- Economic growth declined slightly as of the third term of 2008;- Secondary and tertiary activities witnessed an overall upward trend;- The slowdown in revenues related to money transfers and travel by Moroccan Residents Abroad brought to the fore the timid evolution of revenues from phosphates and derivatives;- A surplus in public finance for the second consecutive year;- A sustained decrease in outstanding internal debt;- An improvement of 0.8 point of GDP in the treasury`s external debt ratio;- The overliquidity that the banking sector had witnessed since 1999, was cut in 2007 and subsequently replaced by a tighter climate in 2008;- An ongoing and exceptional evolution of banking credits to the economy;- Cash issuing less sustained than in 2007 and a rechanneling of investors towards time-deposit investments, due to the consolidation of the banking sector`s competitiveness and the downturn on stock markets;- Inflation at its highest level since 1996;- An increase in the index price of industrial, energetic and mining productions;- In 2008, the stock market closed with a significant loss after five years of ongoing growth;- The unemployment rate was maintained under the threshold of 10%;
Major Trends in Public External Debt:
Mr. CHORFI also evoked the public external debt for the year 2008, and announced that available data showed the following trends:
- A stabilisation of external debt ratio at a lower level (20% of the GDP);- A positive trend in public external debt (MAD 9 billion);- A 1.4 point decrease in the service rate of public external debt; - A greater draw on foreign loans estimated at about MAD 6 billion;- An increase of MAD 2 billion in the global amount of new foreign loan agreements;
Treasury Debt:
The Director of Treasury and External Finance explained the relevant trend by highlighting:
- The treasury`s outstanding debt (internal and external), which witnessed its first decrease ever in 2007, continued in this trend, closing on a more significant decrease of around MAD 4 billion in 2008;- The percentage of internal debt in the global treasury portfolio is 79% , one point behind that of 2007, against 21% for external debt. The 2008 debt redemption reflects the treasury`s control of the budget deficit, despite an economic climate affected by an agricultural year below average, and a record level in spending related to compensation charges;- Treasury debt ratio in its relation to GDP continued its upward trend inaugurated with the decade;- Thanks to sustained current GDP growth and good control of public finance, the above mentioned ratio saw a dramatic drop of 13.5 points;