Morocco's King Approves 2020 Budget Amendment
A Council of Ministers, chaired by King Mohammed VI in Rabat on Monday, examined and approved the headlines of the edited draft budget 2020.
The new budget was elaborated to help the economy recover from the impact of the coronavirus and the restrictive measures relating to it.
The review of the 2020 budget expected the fiscal deficit at 7.5% and growth at -5% on the back of the coronavirus outbreak, the Royal cabinet said on Monday.
It provides for measures to shore up economic activity including an interest rate cap of 3.5% for state-guaranteed loans to both private and public enterprises and incentives for companies to keep staff, the cabinet said in a statement.
Morocco’s economy grew only 0.1% in the first three months this year before dipping -13.8% in the second quarter as the pandemic affected domestic and foreign demand.
The pandemic affected exports, the tourism sector, remittances from Moroccans abroad and foreign investments, all key to Morocco’s hard currency inflows.
The government has mobilized $4 billion in foreign debt to finance its balance of payments with the Central Bank expecting government debt to surge to 75.3% of gross domestic product in 2020 from 65% in 2019.
The special fund for the Management of the Coronavirus Pandemic, which has collected $3.4 billion will continue to be earmarked to mitigate the social and economic consequences of the pandemic.
Morocco’s national economy was clearly affected by the repercussions of the pandemic internationally and locally, and this was highlighted by comparing the economic data for May 2020 with May 2019.
The comparison, according to the Moroccan finance minister, showed the kingdom’s car exports falling by 90%, noting that car exports have become the most important export sector in Morocco with a value of nearly $7 billion at the end of 2019.
The aviation industry also fell by 76%, the textile and clothing industry dropped 74%, and there are expectations that tourism revenues will fall 70%, while foreign direct investment has fallen by 70%.