Morocco: growth expected at 4.6% in 2025 (Ms. Fettah)

by times news cr

2024-07-26 00:56:22

This rate comes after a forecast growth of 3.3% in 2024, with the appearance of signs of remission of the global economy and the continued recovery of the national economy, said Ms. Fettah who presented the execution of the 2024 Budget, the general framework for the preparation of the 2025 Finance Bill (PLF) and the three-year budget programming 2025-2027 during a joint meeting of the finance committees of the two Houses of Parliament.

Chaired by the President of the House of Councillors, Enaam Mayara, in the presence of the Minister Delegate for the Budget, Fouzi Lekjaa, this meeting was also an opportunity for Ms Fettah to stress that in the medium term, the growth rate would exceed the target of 4%.

And to support: “These forecasts are likely to be revised in the event of a deterioration in the outlook for global growth, particularly in Europe, due to the repercussions of geopolitical tensions, or in the event of a new year of drought with a below-average agricultural harvest.”

Furthermore, Ms. Fettah affirmed that the development of the 2025 Finance Bill and the three-year budget programming 2025-2027 are part of a “phase where government action is moving up a gear to complete the process of implementing major projects and fulfilling the commitments of the government program, in application of the High Royal Guidelines and in line with the recommendations of the new development model.”

Regarding the preliminary assumptions of the macroeconomic framework 2025-2027, the minister specified that cereal production would reach 70 million quintals (Mqx), the price of a barrel of Brent oil would be at 80 dollars, the price of a ton of butane at 450 dollars and the dollar exchange rate at 9.8 dirhams, while inflation should stand at 2%.

Furthermore, Mrs. Fettah considered that effective budgetary policy and control of the level of debt are the cornerstones to guarantee the sustainability of public finances, highlighting the importance of continuing the gradual reduction of the budget deficit to maintain this sustainability which constitutes one of the major pillars of government action.

In this wake, she noted that the reduction of the budget deficit would ensure a balance between the sustainability of the implementation of reform projects and development projects, in addition to the strengthening of budgetary margins to preserve the resilience of the national economy in the face of possible shocks.

“The continuation of the budgetary efforts necessary to meet the requirements of economic and social development requires optimal programming of expenditures of all ministerial departments, taking into account the financial capacities of the State, in parallel with the implementation of reforms and the achievement of the expected results,” said Ms. Fettah.

Regarding the target budget deficit trajectory for the period 2025-2027, she explained that the budgetary programming for the next three years is based on continuing the adjustment of this trajectory, with the objective of reducing the deficit to 3.5% of the gross domestic product (GDP) in 2025 and to 3% in 2026 and 2027.

Regarding the debt ratio, the minister noted that this indicator should continue to follow a downward trend in the medium term, going from 69.5% of GDP in 2023 to around 66% at the end of 2027, adding that this would ensure debt sustainability and rebuild budgetary margins to face future risks and crises.

As for the execution of the 2024 Budget, Ms. Fettah specified that inflation should return to levels consistent with the price stability objective, with an average of 1% in the first half of 2024, against 7.9% during the same period in 2023, due to the significant decline in food prices.

During the same period, she continued, exports increased by 4.4%, imports by 2.3%, while the trade deficit decreased by 1%, or 1.2 billion dirhams (MMDH).

According to the minister, the current account deficit of the balance of payments should not exceed 2% of GDP in 2024, with foreign exchange reserves at Bank Al-Maghrib covering 5 and a half months of imports.

The budget deficit, for its part, saw a reduction compared to S1-2023, decreasing to 27.5 billion dirhams, which represents approximately 44.3% of the level provided for by the finance law.

2024-07-26 00:56:22

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