EXECUTIVE SUMMARY
Despite the increase in the Treasury's financing needs over the past two years as a result of the significant readjustment of fiscal policy, bond rates did not experience any particular pressure during H1-2021.
Let us recall that the health crisis¡¦ negative repercussions on the two Supply / Demand circuits brought the fiscal deficit to 7.6% of GDP in 2020. In 2021, the deficit would remain at high levels of 6.3% of GDP against a normative level of 3.5%, due to the adoption of a counter-cyclical fiscal policy(1) .
Thanks to an accommodating monetary policy by Bank Al-Maghrib marked by a historic cutting of the key rate to 1.5% and an orientation towards external financing through a record raising of $ 3 Bn, the Treasury benefited from a significant drop of its financing cost since 2020.
In the light of our half-yearly analysis, five key messages would be retained :
- After a year 2020 marked by an unprecedented -6.3% recession, the Moroccan economy would experience a solid rebound of 5.8% in 2021E. The tangible signs of GDP recovery were reflected positively on the State's public finances during this first half of the year. This attests to the good budgetary execution of the forecasts of the 2021 Finance Act ;
- Despite almost exclusive recourse by the Treasury to the domestic market, the yield curve has not suffered any visible pressure. On the opposite, it continued to slide during H1-2021. Indeed, the better-than-expected recovery of the economy helped to support public finances¡¦ comfortable situation ;
- We are maintaining our main scenario, which favors the stability of bond rates during H2-2021. However, the visible delay in international fundraising of the Treasury, through an execution rate of only 22% at the end of June, could generate ¡§transient¡¨ tensions on the yield curve during
Read more.
