MOROCCO ECONOMIC HIGHLIGHTS

UNCLAS SECTION 01 OF 02 RABAT 002258 SIPDIS SIPDIS DEPT FOR NEA/MAG, NEA/OFI AND INL/AAE DEPT ALSO FOR EB/TPP, EB/IFD AND DRL/IL STATE PASS USTR FOR DOUG BELL STATE PASS USAID FOR JENNIFER RAGLAND USDOC ITA/MAC/ANESA FOR DAVID ROTH USDOC FOR FSC/OIO AND CLDP USDOL FOR ILAB PARIS FOR ZEYA LONDON FOR TSOU ROME FOR ROSE E.O. 12958: N/A TAGS: ECON ECPS EFIN KCOR KIPR MO SUBJECT: MOROCCO ECONOMIC HIGHLIGHTS RABAT 00002258 001.2 OF 002 -------------- GOM Sees 5.4 Percent Growth in 2006 -------------- ¶1. The Government of Morocco's 2006 appropriation bill forecasts a 5.4 percent growth rate and a two percent inflation rate, with oil at $60 a barrel and an exchange rate of nine Moroccan dirham to one U.S. dollar. Finance Minister Fathallah Oualalou revealed these figures during his presentation of the nearly $20 billion 2006 appropriation bill to the lower house of parliament. Oualalou predicted a stable balance of payments in 2006, and a budget deficit of 3.2 percent of GDP. -------------- Perception of Corruption "Stabilized" -------------- ¶2. The Corruption Perception Index (CPI),a composite measure of corruption calculated annually by Transparency International (TI),scored Morocco 3.5 points on a one (worst) to ten (best) scale. The CPI is based on surveys conducted among the business community and market analysts. According to this year's study, Morocco was ranked 78th out of 159 countries, slightly behind last year (77th). Historically, Morocco's position improved from 45th in 1999 to 37th in 2000, but the trend reversed in 2002 (52nd),and continued to fall in 2003 (70th). Morocco was 11th among Arab countries, with Oman taking top honors (6.3 points), and Iraq coming in last (2.2 points),at 137th out of 159 countries surveyed. -------------- Banking Reform Law Passed -------------- ¶3. Minister of Finance officials confirmed to EconCouns that Parliament has finally passed the long-awaited Banking Reform Law. The new law formally establishes the separation of roles between the Central Bank (Bank Al Maghrib) and the Ministry of Finance, giving the Central Bank more independence. Texts detailing the implementation of the law and (and other associated "circulars") have not been distributed yet and Central Bank officials told Econoff they expect to send them out shortly. Finance officials claim the new law will strengthen the role of the central bank in bank supervision and control, enlarge auditors' roles, and give more protection to depositors. Meanwhile, banking sector contacts said the law, although significant in legally formalizing Central Bank independence, will actually have little day-to-day impact on commercial banking operations. -------------- --- Morocco is Third Largest Mobile Market in Africa -------------- --- ¶4. According to "Jeune Afrique" Magazine, Morocco is the third largest mobile market in Africa with about 9.8 million subscribers, following South Africa and Nigeria (22 million and 11 million, respectively). Morocco's mobile penetration of 244 per thousand dwarfs sub-Saharan Africa's average of nine per thousand, according to statistics from the United Nations Development Program (UNDP). -------------- RABAT 00002258 002.2 OF 002 Prison Time for Fake CDs -------------- ¶5. A Casablanca court has sentenced seven people to serve two months in prison and pay a fine of $1,600 each for producing counterfeit Compact Discs. $1,100 of each fine will go to the Moroccan Cinematographic and Musical Association, a grouping of musicians, artists and performers.