Financial stability: no major risk for the ecosystem, but vulnerabilities call for vigilance

The Systemic Risk Coordination and Oversight Committee has delivered its report. He judges that the level of risks to the financial stability of the Kingdom remains moderate, however calling for vigilance.

The Systemic Risk Coordination and Monitoring Committee, made up of representatives of Bank Al-Maghrib, the Moroccan Capital Market Authority, the Insurance and Social Welfare Control Authority and the Treasury Department and External Finance, held its sixteenth meeting yesterday, Thursday, December 22, in Rabat.

After reviewing the situation of the financial system with regard to observed and expected economic and financial trends, the Committee noted that the evolution of macroeconomic conditions has not so far revealed any major risks that might threaten the financial stability.

The Committee nevertheless underlined that “the vulnerabilities arising from the external and internal environment (repercussions of the war in Ukraine, drought, consequences of the pandemic, inflationary pressures, etc.) call for vigilance and continue to be the subject of close monitoring”.

Resumption of growth in 2023

Indeed, according to Bank Al-Maghrib projections, the growth of the national economy should slow to 1.1% in 2022 before accelerating to 3% in 2023 and 3.2% in 2024. inflation and following a sharp acceleration in 2022 to 6.6%, it should ease while remaining at a high level of around 4% on average in 2023 and 2024.

Regarding the external position, the current account deficit should ease to around 2% over the next two years, while official reserve assets should stand at 362.9 billion dirhams in 2023, then at 371 billion dirhams. in 2024, the equivalent of almost six months of imports of goods and services.

With regard to public finances, the budget deficit would gradually decrease from 5.3% of GDP in 2022 to 4.6% in 2023 and 4% in 2024. The Treasury debt, for its part, would decrease to 67.7% of GDP in 2023 and 66.1% in 2024.

Fragility of pension schemes

With regard to the retirement sector, the main basic schemes are experiencing a difficult financial situation, marked overall by the size of their implicit debts and by the depletion of their reserves at various horizons. The systemic pension reform should make it possible to establish a balanced pricing, but also to absorb, in significant proportions, the uncovered past commitments, and therefore to restore financial balances in the future.

Despite a difficult context, bank credit intended for the non-financial sector should accelerate to 5.1% in 2022, driven mainly by the liquidity facilities granted to private companies. It should fall to 3.3% in 2023 before recovering to 5.5% in 2024. The non-performing loans rate stabilized at 8.7% for a provisioning rate of 67% at the end of October 2022.