Overview of the Moroccan Economy
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Attijariwafa bank As of 30 June 2016 Financial Communication 2016 Content Political context and growth of the Moroccan economy Balance of payments trend Public finance Interest and exchange rates 2 - Financial Communication & Investors Relation - Political context Context Parliament composition • July 2011: New constitution approved by referendum In 2016 The current government includes 12 members of the PJD, 8 of the RNI,6 of • November 2011: Legislative elections 62 16.3% the MP, 5 of the PPS and 106 27.9% 8 ministers without • December 2011: New government with a Chief of 20 5.3% party affiliation Government from the parliamentary majority 32 8.4% 48 60 12.6% 15.8% • September 2015: Municipal and regional elections 52 13.7% • October 2016: Legislative elections Parti de la Justice et du Développement (PJD) Parti Authenticité et Modernité (PAM) Parti de l'Istiqlal Mouvement Populaire (MP) Rassemblement National des Indépendants (RNI) Parti du Progrès et du Socialisme (PPS) Other political parties ° Morocco has been a Monarchy for more than 13 centuries (constitutional and parliamentary Monarchy since 1962) ° Successful transition within the Arab spring context thanks to a decade of reforms and a stable social and political environment 3 - Financial Communication & Investors Relation - GDP growth between 1990 and 2017 Real GDP growth Non-agricultural GDP % Average growth of non-agricultural GDP GDP growth in % Average growth of non-agricultural GDP ~3% ~4% ~5% ~3% GDP growth 2015: 4.5% Non Agricultural GDP growth in 2015 : 3.1% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F 2016F 2017F GDP growth 2016F :1.5%* Non Agricultural GDP growth in 2016F: 3.1%* GDP growth 2017F : 3.5%* (*) High Commission for Planning of Morocco – July 2016 Non Agricultural GDP growth in 2017F : 2.9%* • 5% Non-agricultural GDP growth between 2004 and 2011 compared to 3% in the 1990s as result of: - Strong domestic demand supported by the emergence of a new Moroccan middle class - Higher level of diversification of sources of growth and emergence of export industries : Offshoring, Automotive, Electrical and Electronic, Aerospace sectors - Strong growth of public investment and launch of major infrastructure projects (highways, ports, airports, railway infrastructure) • Slow-down of Non-Agricultural GDP since 2012 mainly due to the Global Crisis and the Arab Spring 4 - Financial Communication & Investors Relation - GDP growth GDP growth 5.0% 4.7% 4.5% 4.0% 4.0% 3.8% 3.9% 3.9% 3.0% 2.4% 1.5% 2010 2011 2012 2013 2014 2015F 2016F 2017F* 2018F* 2019F* 2020F* Non-agricultural GDP growth 5.4% 5.0% 4.7% 3.7% 3.7% 3.8% 3.0% 3.1% 3.1% 3.1% 3.0% 2010 2011 2012 2013 2014 2015F 2016F 2017F* 2018F* 2019F* 2020F* (*) AWB Forcast 5 - Financial Communication & Investors Relation - Control over inflation since 1995 % Average inflation over the period In % 8 8.0 7.0 6.1 ~1% 6 5.7 ~2% 5.2 5.2 4 ~6% 3.7 3.3 3.0 2.8 2.8 2 1.9 2.0 1.6 1.4 1.5 1.9 1.2 1.3 1.0 1.0 1.0 0.9 0.7 0.6 0.9 0.4 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 1H2016 Source: MEF/HCP 6 - Financial Communication & Investors Relation - Demographic trends Demographic growth CAGR 2.6% 2.6 % 2.2% 1.7% 1.1% 0.9% 1.2% 0.9% 0.9% 0.9% 33.5 31.9 32.2 32.6 32.9 33.2 28.5 24.2 19.4 15.0 11.6 1960 1970 1980 1990 2000 2010 2011 2012 2013 2014 2015 Age Pyramid (in ‘000) Fertility rate, total (births per woman since 1960) Females 210 75 + 188 335 75+ 404 Males 180 70-74 196 265 70-74 335 205 65-69 182 346 65-69 378 329 60-64 350 595 60-64 596 329 55-59 330 733 55-59 748 7.1 375 50-54 451 856 50-54 960 6.7 406 45-49 425 852 45-49 992 5.7 657 40-44 631 986 40-44 1 151 804 35-39 771 1 116 35-39 1 295 923 30-34 1 013 1 339 30-34 1 484 4.1 981 25-29 1 069 1 492 25-29 1 531 2.7 1 248 20-24 1 287 1 620 20-24 1 565 2.5 2.5 2.5 2.5 2.5 1 409 15-19 1 433 1 523 15-19 1 471 1 617 10-14 1 589 1 467 10-14 1 409 1 657 05-09 1 599 1 465 05-09 1 395 1 614 00-04 1 560 1 433 00-04 1 366 1994 2015 1960 1970 1980 1990 2000 2010 2011 2012 2013 2014 Source : HCP ; World Bank 7 - Financial Communication & Investors Relation - Content Political context and growth of the Moroccan economy Balance of payments trend Public finance Interest and exchange rates 8 - Financial Communication & Investors Relation - Balance of payments trend Trade* deficit (%GDP) Current Account Balance (% GDP) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q16 1.7% 1.8% 2.2% -0.1% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q16 -5.7% -6.6%-6.7% -2.6% -8.7% -2.0% -9.7% -8.4% -4.5% -10.9% -5.2%-5.4% -5.8% -11.9% -12.6% -8.0% -7.6% -14.1% -14.4% -14.9%-14.3% -9.7% Breakdown of Foreign Direct Investment ** Capital and Financial Transactions Account UK Spain Other 8.6% 5% 3% 8.2% 5% 7.8% France Suisse 28% 6.2% 6.4% 6.0% 6% 5.9% 5.7% 4.8% Other MENA 8% 2.5% 2.2% USA 1.5% 1.7% 8% UAE 14% Other Europe 10% Saudi Arabia 13% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q16 (*) including Tourism (**) As of 31 December 2014 9 - Financial Communication & Investors Relation - Balance of payments: Main components trend MAD Bn The Global crisis The “Arab Spring” impact impact Inflows +6% -8% 39 -23% +3% 32 +22% 36 30 39 +4% 62 35 -12% +2% 39 59 -4% 59 59 FDI +26% +8% 58 +2% -11%** +8% 53 54 -2% 59 -5% 31 58 -0.7% 57 +8% 59 -2% 58 Remittances from 50 +5% -0.3% +4%** 56 -5% 56 Morrocans Living +7% 17 Abroad 53 +3%** 29 24 +9% 26 Tourism 35 260 229 241 240 31 +12% 204 199 223 Exports(*) 159 (goods and services) 139 84 +19% -22% +25% +15% +5% -7% +8% +9% +4%** 2003 2008 2009 2010 2011 2012 2013 2014 2015 1H16 MAD Bn Outflows +21% -15% +14% +18% +7% -4% +1% -5% +6%** 426 399 411 415 396 359 338 Imports 299 (goods and 217 services) 136 (*) : excluding Tourism 2003 2008 2009 2010 2011 2012 2013 2014 2015 1H16 (**) : based on June 2015 10 - Financial Communication & Investors Relation - Imports and exports: Main components trend in 1H2016 (compared to 1H2015) % of total volume* Imports of goods (main components) Annual growth** Main drivers Total imports +3.9% ° Imports of goods & services : +6.2% ° Imports (excluding Energy) : +13.9% Soft Commodities 11.6 +14.2% • Economic growth and public and private investments Consumption goods 20.1 +15.8% • Custom barriers dismantlement and signing of several FTAs Equipment products 27.9 +15.8% • Emerging middle class Semi-finished products 23.5 +9.1% • Commodities spot prices Energy 12.3 -30.6% • Economic and demographic growth Exports of goods (main components) Annual growth Main drivers ° Exports of goods & services : +3.7% Total exports*** +1.8% ° Exports (excluding phosphates) : +6.3% Aeronautics +9.7% • National strategy aiming at supporting the emergence of export 3.9 Electronics 3.8 +6.7% industries (The “Global Trades of Morocco”: Automotive, Aeronautics, Electronics,...) Automotive 25.0 +14.9% Textile 15.9 +5.2% • Mining,Tex. & Agri.: historical sectors with new strategies (e.g.: Green National Plan for Agri business, Fast Fashion-focused new Agriculture 22.2 +7.2% strategy for Textile,...) Phosphate & Derivatives • OCP is a major world player and market maker in this industry 17.1 -12.1% with an ambitious strategy optimizing value vs. volume and adapting production to the macro-economic context in Morocco (*) June 2016 figures ; (**) 1H2016 compared to 1H2015 ; (***) excluding Tourism & services 11 - Financial Communication & Investors Relation - Imports and exports: x% CAGR Focus on « The Global Trades of Morocco » Context Automotive sector ° Ambitious export-oriented industrial ° Strong growth of the Automotive sector over the strategy aiming at positioning last decade (wiring industry: MAD 10.9 billion and Morocco as a leading regional player car manufacturing: MAD 15.4 billion in terms of (the National Pact for the Industrial exports in June 2016) Emergence) ° Launch of the 1 st production line of the Renault Exports (in MAD billion) ° Competitive advantages of Morocco: plant in 2012 and inauguration of the second in October 2013 (a EUR 1 bn investment) +18% +21% +15%** - Highly skilled workforce at a - 340,000 vehicles produced from 2014 competitive cost: e.g. 10,000 48.6 - 40.3 engineers graduating each year, 60 cars/hour 28.7 launch of new specialized - More than 170,000 vehicles exported in 2014 12.7 institutes* ° 25.0% of Moroccan exports in June 2016 from - Best Standards infrastructures, 10.3% in 2007 2007 2014 2015 1H16 e.g.: ° PSA 1 st Assembly plant in Morocco (close to Kenitra) • 1,800 km of highways (in 2012) scheduled to start production in 2019 (capacity: 90,000 vehicles/year and could reach 200,000 in • Tanger Med: the largest port of 2023) and requires an investment of EUR 557 the Mediterranean and Africa million (USD628 million) - Attractive incentive framework Exports (in MAD billion) through the free zone status Aeronautics sector providing a total exemption from ° 100 companies operating in the Aerospace industry +12% +4% +10%** corporate tax and a potential aid with the presence of international groups such as for the set up (up to 10% of the EADS, Safran, Zodiac Aerospace, Boeing 7.3 total investment) ° Ongoing set up of a new Bombardier plant (MAD 2.0 7.0 4.5 billion investment, 850 direct jobs and more than 3.1 4,000 indirect jobs) ° 3.9% of Moroccan exports in June 2016 from 2.5% in 2007 2007 2014 2015 1H16 (*) e.g., Institute of Aviation Trades (IMA) and Specialized Institute of Aviation Trades and Airport Logistics (ISMALA) and Institute for Training Professionals