Consumer loans exacerbate non-payment of bank debts worth 38.8 billion dirhams

New data revealed a deterioration in the financial situation of families since the beginning of this year. Figures issued in the economic situational note issued by the Bank of Morocco stated that the value of outstanding loans owed by families to banks stabilized at 38.8 billion dirhams at the end of last February, an increase of 5.2 percent on an annual basis, out of a total outstanding loans amounting to 95.1 billion dirhams during the period. The same period.

The same statistics recorded an increase in families resorting to borrowing in order to finance their consumption, despite the high interest rates on loans, especially consumer ones, as they obtained a value of 57.5 billion dirhams, in parallel with the growing level of their borrowing from banks, as they benefited from a total of loans worth 385.1 billion dirhams. dirham; Of which 243.8 billion dirhams are housing loans.

It is expected that the upward trend of household borrowing will continue, given the indicators recently issued by a group of official statistical bodies. Led by the High Commission for Planning, which revealed that 42.1 percent of families depleted their savings or resorted to borrowing during the last quarters of last year, with pessimistic expectations of the ability to save during the next 12 months, and 81.3 percent of them expected that food prices would continue to rise for the same period. .

Damage to purchasing power

The purchasing power of families was negatively affected by the repercussions of the inflation wave, which peaked in 2022, and continued to a relatively lesser extent during the past year, as this was clearly demonstrated by the indicator of the ability to purchase sustainable goods within the household situational research issued by the Planning Commission. This is because a percentage of 79.8 percent of families stated that the conditions are not appropriate to take this step during the fourth semester of 2023.

Muhammad Amin Al-Hassani, an economic expert, considered that the current economic situation and the ongoing repercussions of the Corona pandemic are two factors that are tightening the stranglehold on the purchasing power of families, explaining that the circumstantial measures taken by the government during the last period to strengthen the resistance of the economic structure and families in order to confront the rise in prices (harmful to internal demand) remain. It is insufficient and requires additional measures to stimulate income and increase the purchasing power of active individuals.

The economist added that these measures could take the form of reducing the level of tax pressure, which is considered high compared to a number of countries, and fortifying some consumer goods in the face of global price fluctuations.

Al-Hassani stressed, in a statement to Hespress newspaper, that the repercussions of inflation are structural during the current period and directly affect the purchasing power of citizens in the medium and long term, indicating that stimulating internal demand does not necessarily mean enhancing purchasing power that has been damaged by successive waves of high prices.

According to data from the Planning Commission, the level of household spending, which is considered the primary indicator of their standard of living, recorded a significant decline due to the repercussions of inflation and the Russian war on Ukraine, by one thousand and 100 dirhams, moving from 20 thousand and 40 dirhams to 18 thousand and 940 dirhams, noting that Food represents more than a third of these expenses (36.4 percent).

Increase tax pressure

In order to improve the financial situation of families, the government chose to invest in long-term options, mainly linked to reducing tax pressure; Such as reforming the value-added tax, and reducing and exempting a large number of consumer products from this tax, which was a burden on the family budget.

In this regard, the current finance law provides, among other things, a tax exemption on pharmaceutical products, school supplies, products and materials included in their composition, water intended for domestic use, butter derived from milk, canned sardines, powdered milk, and household soap.

In this context, Muhammad Yazidi Shafi’i, an economist, said that the reduction or exemption from value-added tax should lead to lower prices and improved purchasing power of families.

In this regard, the economic expert cited previous statements by Nadia Fattah, Minister of Economy and Finance, in the House of Representatives, during which she affirmed that the total exemption from value-added tax for some products currently subject to rates of 14 percent and 7 percent will have a positive impact on the purchasing power of the consumer.

Yazidi Shafi’i stressed that improving the financial situation of families and reducing their dependence on borrowing in order to finance consumption goes through ensuring price stability and developing income, in turn reducing the size of the impact of lifting the tax pressure on a group of consumer items, explaining that the reversal of this measure, even if it is positive, will not It is clear in light of the current inflationary context as long as the market is based on the principle of freedom of prices and competition and subject to the law of supply and demand.

The current Finance Law also adopted a gradual approach over a period of 3 years, aiming to reduce the value-added tax rate applied to public transportation and the transport of goods, and thus the value-added tax rate on the aforementioned services will decline from 14 percent to 13 percent during the current year, and then to 12 percent in the current year. 100 at the beginning of 2025 and 10 percent as of January 2026.