AGR/Morocco: A visible economic recovery on public finances in 2021
Attijari Global Research (AGR) notes, in its fixed income research report on the rates market in 2021, a visible economic recovery in public finances over the past year.
“The tangible signs of recovery of the national economy to more +7.3% in 2021 have been reflected positively in the public finances of the State”, indicates AGR in this report, noting that in this context, the budget deficit is improved by 1.2 points to 6.4% of GDP, or 70.9 billion dirhams (MMDH) during the previous year.
And to continue that the Treasury financing policy broke, in 2021, with the trend observed over the past two years.
While the share of domestic financing represented only 49% over the 2019-2020 period, this rose to 90% of total Treasury financing in 2021. Indeed, external drawings stood at 18.4 MMDH against a forecast of the finance law (LF-2021) of 41 MMDH, i.e. a low achievement rate of 45%.
“Despite an increase in Treasury financing needs and a pronounced recourse to the internal market, we did not witness any visible tensions on the State Budget in 2021”, underline the analysts of AGR , explaining that this is a situation justified in part by the concretization of innovative financing from the Treasury in 2021. These have made it possible to collect a total amount of 12 billion dirhams.
At the same time, the expansive effect of the two international exits in 2020 was maintained on the Treasury accounts throughout 2021. The significant levels of Treasury investments on the money market attest to this.
Overall outstandings including unsecured investments and reverse repurchase agreements averaged 10 billion dirhams on a daily basis in 2021, i.e. virtually stagnant compared to 2020. This was limited to 7.2 billion dirhams in 2019.
In addition, the active management of Treasury debt through the multiplication of Treasury bond swap operations (BDT) in 2021 has made it possible to readjust the debt profile and smooth out short-term falls. These increased from 6.7 billion dirhams in 2019 to 20.7 billion dirhams in 2020 to reach more than 25 billion dirhams in 2021.