Morocco govt sees GDP growth at 3 pct in 2016-budget draft

The Moroccan government sees the country’s gross domestic product (GDP) growing by 3 percent in 2016

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The Moroccan government sees the country’s gross domestic product (GDP) growing by 3 percent in 2016, down from an estimated 5 percent in 2015, a government statement on the national budget draft said.

The forecast is more ambitious than that of Morocco’s planning agency, which had said the economy of the North African kingdom would grow by 2.6 pct in 2016 as agricultural output fell from an exceptional 2015.

Agriculture accounts for more than 15 percent of the economy, with this year's cereal harvest hitting a record 11 million tonnes.

Morocco started to repair its public finances three years ago after huge deficits in 2012 when the government spent billions to calm Arab spring-like protests.

Morocco has done more than most North African countries to make painful changes required by international lenders to curb deficits, such as ending fuel subsidies and freezing public sector hiring. The government still controls the prices of wheat, sugar and cooking gas.

The cabinet statement did not give details on how much it was planning to spend on subsidies in 2016. It has budgeted 23 billion Moroccan dirhams in 2015, down from 35 billion in 2014 and 42 billion in 2013.

The budget deficit is expected to come in at 3.5 percent of GDP in 2016, down from 4.3 percent in 2015, while inflation is seen at 1.7 percent, according to government estimates.

The government said total public investment would reach 189 billion Moroccan dirhams ($19.7 billion) in 2016, including 61 billion dirhams planned by public administrations. State-run companies would invest the rest.

The draft says it is creating 26,000 jobs in 2016 and expects more jobs to come from state investments. Morocco’s official unemployment rate is 8.7 percent this year.

($1 = 9.5939 Moroccan dirham)