Macroeconomic risks remain moderate overall in an international environment marked by uncertainties, according to Morocco's Central Bank (Bank Al-Maghrib). "In an international environment marked by uncertainties (persisting trade and geopolitical tensions, rising protectionism, Brexit concerns, markets volatility) macroeconomic risks remain moderate overall," said the Bank in a statement issued after the eighth meeting of the Coordination and Systemic Risk Monitoring Committee (CSRMC), held Tuesday in Rabat. With respect to external accounts, the Committee, which analyzed the risk mapping of the financial system, stressed that the current account deficit, after widening in 2018 to 4.4 percent of GDP, is expected to gradually ease over the forecast horizon and net international reserves would continue to provide more than 5 months of imports of goods and services. Domestically, economic growth would slow down in 2018 to 3.3 percent from 4.1 percent in 2017, due to deceleration in agricultural value added and the slow recovery of nonagricultural activities. The fiscal deficit is expected to widen in 2018 to 3.7 percent of GDP and to continue, based on Bank Al-Maghrib's forecasts, to evolve around this level in the medium term. Banking sector managed to achieve a rise in the net result during the first half of 2018, covering mainly an increase of the net banking income coupled with an improvement in the balance of non-operating income. Regarding the insurance industry, it continues to be strong, the statement pointed out, adding that from a prudential perspective, the coverage rates of technical liabilities by investments of insurance and reinsurance companies remain above the minimum regulatory requirements.
