The finance bill expects Morocco's economy to shrink for the first time since the 1990s, in light of several sectors' impacts.
Rabat – The Moroccan Head of the Government revealed in a circular that Morocco’s finance bill expects an economic growth of 5.4% in 2021, compared to -5% in 2020.
The finance bill is based on three priorities: the implementation of the National Economic Recovery Plan, the generalization of social coverage, and the implementation of the exemplary nature of the State.
The finance bill forecast also takes into account the national and the international economic situation that the COVID-19 caused,according to Morocco’s state media.
The circular indicates that the global economy is expected to endure more severe contraction than the 2008 economic crisis, especially for Morocco’s main partners, such as the European Union.
In addition, the finance bill expects Morocco‘s economy to shrink for the first time since the 1990s, in light of several sectors’ impacts.
Among the negative aspects that circular highlighted is the drought that hit Morocco’s agricultural season for this year.
The bill expects the impact to reach macroeconomics balances as well, due to the worsening budget deficit and the current account of the balance of payments.
Morocco’s House of Councillors approved the amended 2020 finance bill on July 17 with a majority vote. Twenty-nine deputies approved the finance bill, 13 rejected it, and four abstained.
The execution of Morocco’s finance bill has shown a budget deficit of MAD 28.8 billion ($3.1 billion) for the second quarter of 2020.
The deficit comes from ordinary resources of MAD 203.1 billion ($22.1 billion), excluding loan receipts, against charges of MAD 231.8 billion ($25.2 billion), excluding amortization of the debt.
Meanwhile, in a May 13 report by the European Bank for Reconstruction and Development (EBRD), the Moroccan GDP was forecasted to shrink by 2% in 2020 following the COVID-19 crisis, and rebound by 4% in 2021.
EBRD attributes the slowdown to the sharp regression of tourism activity, a sector that represents 11% of the country’s GDP.