Macroeconomic conditions will continue to deteriorate until 2021

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“Despite broadly moderate developments in 2019, macroeconomic risks are expected to worsen in 2020, as a result of the pandemic shock, the repercussions of which will undoubtedly deteriorate macroeconomic conditions in 2020 before gradually starting a recovery from 2021”, indicates Bank Al-Maghrib (BAM) in a press release sanctioning the work of this 11th meeting of the CCSRS.

Internationally, the economic situation, already weakened in 2019 by weak global growth, will be shaken in 2020 by an unprecedented economic recession and a weakening of the financial and budgetary situation of the main developed and emerging economies, the same source predicts. At the national level, the Committee notes that growth, doubly weakened in 2020 by the effects of drought and by the total or partial cessation of activity in several sectors due to the pandemic, should contract at -5, 2% as part of a “V” recovery scenario.

Regarding external accounts, the current account deficit, after its strengthening by 1.2 points of GDP in 2019, should widen sharply in 2020 to 10.3% of GDP before partially improving in 2021 to 5.8% thanks in particular to the mobilization of external funding and the rapid recovery planned for 2021.

Official reserve assets, which improved in 2019 to 253.4 billion dirhams (MMDH) providing 6 months and 8 days of imports of goods and services, should decrease over the forecast horizon. Their level would, however, cover around 5 months of imports in both 2020 and 2021. With regard to public finances, the budget deficit should widen to 7.6% in 2020 before decreasing to 5% in 2021, and translate into an increase in the Treasury debt which should reach 75.3% of GDP then 75.4% in 2020 and 2021 respectively.

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