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Macroeconomic risks remain «broadly moderate», says Morocco's central bank

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Macroeconomic risks remain broadly moderate amid stronger global economic activity, Bank Al Maghrib (Morocco's central bank) said.

In terms of external conditions, the current account deficit narrowed in 2017, mainly due to easing trade deficit and higher travel receipts and transfers from Moroccans living abroad, the bank said in a press release following the 7th meeting of the Coordination and Systemic Risk Monitoring Committee held in Rabat.

Under these conditions, net international reserves reached 240.9 billion dirhams in 2017, providing coverage for 5 months and 21 days of imports of goods and services, it added.

"Domestically, national growth accelerated in 2017 to 4.1 percent from 1.1 percent in 2016, reflecting the rebound in agricultural value added and the recovery, albeit at a slow pace, in non-agricultural activities."

At the same time, fiscal adjustment resumed after a halt in 2016, the source said, adding that the rate of Treasury’s debt, although slightly up in 2017, should trend downward as of 2018.

The trend in global growth would be generally favorable, although surrounded by certain risks mostly related to the escalation of geopolitical tensions, the rise of protectionism and the political difficulties of some European countries, it noted, adding that national GDP would grow less rapidly, by 3.6 percent in 2018 and 3.1 percent in 2019.

In a context of slow non-agricultural recovery, bank lending to nonfinancial corporations (NFC) slightly decelerated, covering in particular a slowdown in credit to public corporations and a moderate increase in loans to private corporations, while the rate of NFCs’ nonperforming loans declined somewhat but remains high.  

Despite a still-risky environment, the banking sector consolidated its financial position. In terms of profitability, banks’ cumulative profit improved compared to the normative income of 2016, owing to lower credit risk cost and a good performance abroad.

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