The percentage of debts increased in Morocco at the end of last October, reaching 11% for non-financial businesses, and about 9.9% for families, finds the Committee for Coordination and Oversight of Global Risks.
The committee, which includes various Moroccan financial regulatory institutions, namely Bank Al-Maghrib, the Capital Market Regulatory Authority, the Ministry of Economy, and Finance and the Insurance and Social Reserve Control Authority, discussed on Tuesday the various risks and weaknesses threatening the national financial system in its 14th gathering.
Following the meeting that took place in the headquarters of Bank Al Maghrib, the official body concluded that the current account deficit of Morocco will decrease to 5.3 % of GDP in 2022, though it is expected to improve to 4.9% in 2023.
As the state stopped granting pandemic loans to the non-financial sector, the loans’ rate is expected to stay between 3.4% and 3.7% in 2021 and 2022, while it may reach 4.4% by 2023, according to the committee.
Meanwhile, the macroeconomic risks surrounding financial stability have generally diminished thanks to the recovery of the national economy in 2021 after surviving the toughest period of the pandemic, according to the committee’s analysis,
Despite the ongoing crisis, the national banking sector still enjoys solid foundations in terms of profitability, solvency, and liquidity, as the net result of banks recovered during the first half of 2021 after the decline recorded in 2020 amid the pandemic.
Insurance companies also recorded, at the end of June 2021, an increase in their NET result by 21.3%, thanks to the improvement of financial activity’s performance after the quarantine period.
Regarding the retirement system, the committee said that the major retirement funds are experiencing a difficult financial situation, characterized mainly by the escalation of their implicit debts and the depletion of their reserves in the near future.
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