A research-analytical paper from Bank Al Maghreb experts revealed the “disparity in the volume of spending” within the economic recovery efforts the countries has taken to combat the repercussions of the pandemic economically and socially.
BAM noted that “Morocco is one of the emerging and developing countries that allocated 6.3% of GDP for recovery efforts for 2020 and 2021.”
The data of the study and analysis, carried out by two researchers Kamal Lahlou, head of the Public Policy Analysis Department in the Research Department at Bank Al-Maghrib, and Saida Hajjaj, an economic researcher in the same department, revealed new data indicating how the money allocated by the state for recovery efforts was spent during the health crisis.
0\.3% of Morocco’s gross domestic product went in support of the health sector, while 2.1% of it went to measures to support the resilience of families and businesses.
While credit guarantees for loans by the state received the largest share of the Kingdom’s efforts to support the recovery of the economy during the pandemic, with a rate of 3.9%.
For the case of Morocco, the research paper praised “the implementation of significant financial and monetary measures to deal with the economic and social repercussions of the health crisis,” dividing “the Kingdom’s handling and response to economic recovery efforts against the COVID-19 crisis” into two phases.
The first began with the establishment of the “Special Fund for the Management of the COVID-19 Pandemic.”
As the response focused on “strengthening health structures, supporting families, preserving jobs and employment positions in the private sector, while mitigating and mitigating the shock to the cash flow of companies and contracting.”
The second pertained to overall economic “recovery,” with a plan worth MAD 120 billion, aiming to facilitate companies’ access to financing through new credit guarantee schemes, and revitalizing the economy through the launch of the “Mohammed VI Investment Fund.”
Internationally, research document recorded an “unprecedented global economic recession due to the COVID-19 pandemic,” which forced governments to resort to using multiple support measures for families and businesses in order to mitigate the effects of the crisis and revive economic activity.
However, the experts highlight “the discrepancy in the volume of spending during 2020 and 2021 between economies compared to Morocco.”
Data from the International Monetary Fund (IMF) and the World Bank was a base for examining the “macro-level economic determinants” of recovery efforts in response to the pandemic in about 86 emerging and developing countries, including Morocco.
The two researchers noted an important “lack of consensus among economists and finance experts regarding the determinants of recovery efforts,” before analyzing the various macro-financial, social and health determinants of recovery efforts in emerging and developing countries.
Results obtained after the analysis showed that “the high levels of debt and the current account deficit have contributed significantly to reducing the affects of stimulus efforts and economic recovery in various countries of the world.”
“The severity of the remarkable economic recession in 2020 and the Human Development Index contributed to increasing recovery efforts,” says the paper, noting that “the size of the informal economy doubled the need for aid.”
“Because workers in informal activities do not benefit from social security services,” further support had to be provided by the state during this state of health emergency and economic lull.
The experts note “a positive impact of the development of the financial sector on recovery efforts that targeted businesses through credit guarantee mechanisms.”
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