The Moroccan economy in crisis of confidence

The Moroccan economy is weakly competitive and produces less and less wealth and jobs. Bank deposits and credits fall. Public debt reaches unsustainable levels. A dark picture!

Just as optimism, companion of the effort, can help to get out of difficulties, so much the smug optimism of the government, as for the prospects of economic growth, is a foolishness. How to be optimistic about the country's economy when two large institutions, namely Bank Al Maghrib and HCP (High Commission for Planning), draw a blackboard for the year 2019 and remain cautious about their forecasts for the year 2020.

The facts, first. At the end of its third monetary policy council of the current year, Abdellatif Jouahri, Governor of Bank Al-Maghrib, has delivered economic forecasts, globally negative, for the year 2019. In terms of economic growth, should register a degradation. Growth is expected to decelerate again to 2.7% in 2019, as a result of a smaller (than expected) cereal harvest (52 million quintals) than expected, not to mention weak, and the continued recovery of off-farm activities (3, 6%, compared to 2.6% in 2018).

A breathless model

In 2020, growth is expected to rise to 3.8 percent, a slower pace than expected by the central bank in June 2019, mainly due to the less promising outlook for foreign demand. Indeed, the deterioration in the outlook for global growth is leading to a drop in foreign demand for Morocco. "Trade conflicts, geopolitical tensions and uncertainties surrounding Brexit terms are driving increased market volatility and continuing to weigh on trade and corporate investment. In these conditions, the outlook for the global economy has deteriorated, with a slowdown expected this year, "says the Central Bank.

And it is domestic demand that will continue to drive growth, thanks "notably to contained inflation, wage increases and increased family allowances decided in the context of social dialogue". This analysis of the central bank shows the weakness of the national economic model, out of breath, based on domestic consumption, households and businesses, at a time when household debt is increasing and investment and business productivity is declining.

The Kingdom's foreign trade (exports / imports) would, according to BAM, continue to make a negative contribution to growth because of the low productivity and competitiveness of our economy. As for FDI (Foreign Direct Investment), after exceptional revenues in 2018 related to the sale of Saham Finance in Sanlam, which did not benefit the tax (gift measure offered by the former Minister of Finance Mohamed Boussaïd to the company owned by the Minister of Industry Moulay Hafid Elalamy) their level should stabilize at an amount equivalent to nearly 3.5% of GDP, knowing that they have been in a downward trend for almost 2 years.

Low productivity

On the fiscal deficit side, excluding privatization, where the government has not kept its commitments, it should be around 4% of GDP in 2019 before declining to 3.8% of GDP in 2020. The impact of the dialogue increase in payroll) and the drop in corporate tax revenues (which reflects the tax evasion of the majority of companies of all sizes) would be slightly mitigated by the decrease in the compensation charge (subsidy for hydrocarbons). suppressed) which reflects the austerity policy advocated by the International Monetary Fund. As for the High Commissioner for Planning (HCP), led by Ahmed Lahlimi, his latest statistics on the balance sheet of the national economy in the second quarter of 2019 show a slowdown in growth, with a rate of 2.5%, instead of 2.6% during the same quarter the previous year.

You said ambition?

A close look at the analysis of the HCP and Bank Al-Maghrib, one wonders about the ambitions of emergence and the usefulness of the Industrial Acceleration Plan when to measure the evolution of economic growth we are still referring to agricultural value added rather than industrial value added. Another important point that marks the national economy in 2019 is the central bank's reaction to lower the rate of the compulsory monetary reserve following the worsening of the banks' liquidity deficit caused by the rise in the fiduciary circulation (circulation of cash).

The cash coming out of the banking system is partly behind the slowdown in deposits, which now increase more slowly than loans (knowing that deposits are used to grant credits). Thus, the cash in circulation increases of a very worrying way: one went from 10 billion DH of increase per year to 17 billion DH today. This prompted Abdellatif Jouahri, governor of Bank Al Maghrib, to ask banks to take a closer look at these developments, which concern especially MRE (Moroccans living abroad). A situation that preoccupies the central bank to the highest degree and begs the question: Why do so many Moroccan residents and Moroccans around the world empty their bank accounts? Is this not a lack of visibility and confidence in the economy and in the management of public affairs by the El Otmani government?

Another thing is that public debt is unsustainable because of the government's continued indebtedness to international donors, which is largely used to pay off debts and related interests and the train. life of public administrations and ministries, without creating wealth. As a result, not only is the country's competitiveness at its lowest, worse yet, the government is mortgaging the future of future generations today with excessive debt.