Budget deficit curbed to 2.3% of GDP in fiscal 1998-99, minister
Morocco-Maghreb-USA, Economics, 4/20/2000
The budget deficit has been curbed to 2.3% of the gross domestic product during fiscal 1998-99 and to 3.1 of the GDP in fiscal 1997-98, thanks to the progress scored at the macroeconomic level, said in Washington Tuesday Moroccan Minister of Economy and Finance Fathallah Oualalou.
Oualalou was speaking at a Maghreban-American meeting on a US-Maghreb partnership initiative, known as the Eizenstat initiative.
The initiative named after a former U.S. secretary of state for economic affairs revolves around establishing a permanent dialogue at the highest level between the USA and the Maghreban countries--Algeria, Morocco and Tunisia--, encouraging these countries to lift barriers to ensure a better flow of trade exchanges and materializing inter-Maghreban complementarity, leading to better political relations.
Oualalou said curbing the budget deficit and a stringent monetary policy helped curb inflation to below 2% during the past four years and to only 0.7% in 1999.
The deficit of the current account of the balance of payments was reduced to O.8 % in 1999 thanks to the good performance of some exports and to tourism returns that progressed by 15.4 % in 1999.
During the same year, he added, foreign investments reached $2 billion. The amount enabled to cover the deficit of the balance of payments and brought the hard currency reserves to $ 6 billion, i.e. the equivalent of six months of imports of goods and services.
The foreign debt ratio has also dropped from 68% of the GDP in 1995 to 51 % of the GDP in 1999. The weight of the foreign public debt servicing remains however very heavy, constraining the state budget and growth, Oualalou said.
Touching on economic growth, he said despite the drought hitting the country in 1999, this is the first time in similar circumstances that the growth is not negative. He added that the government is currently thoroughly thinking over a strategy that will mark a turning point in the management of rural and agricultural development.
He renewed the government's determination to consolidate macroeconomic stability, to carry on efforts to alleviate the debt burden and to carry on structural reforms to attract investments, and to further social development in line with the commitments made to the World Bank.
He surveyed efforts made to promote the telecommunication sector for a better integration of national economy in its regional and world environment. He recalled that the Moroccan telecommunication company Maroc-Telecom, the Moroccan carrier Royal Air Maroc and other financial and industrial institutions will be privatized in the course of the current year.
As to forecasts for this year, Oualalou said macroeconomic sectors will post a 3% growth in real terms, the GDP--not taking into account agricultural sector-- will increase by 4%, investments will stand at 25% of the GDP while inflation will be curbed to 2%.
The deficit of the balance of payments will account for 1.5% of the GDP, as tourism returns will increase by 8% and imports by 11%.
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