A decline in the rate of savings of households and non-financial companies still resort to bank loans to cover their funding needs

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The national accounts of the institutional sectors, completed by the High Commission for Planning during 2017, which represents the integrated series of non-financial and financial accounts by base year 2007, revealed that the gross domestic product (GDP) at current prices amounted to 1063.3 billion dirhams in 2017, Compared to 2016.

Financial and non-financial companies created 43.4 percent of the national wealth, 14.5 percent of the total national disposable income, 2.3 percent of which are for financial companies, 52 percent for national savings and 56 percent for investment.

Families and non-profit institutions in the household sector produced 29.7 percent of the national wealth, 62.5 percent of the total national disposable income, 29.3 percent of national savings and 25.6 percent of investment. Purchasing power has improved by 2.3 per cent in a context of slowing inflation.

Regarding the contribution of the institutional sectors to gross domestic product and the total national income available, the memorandum of the High Commissioner for Planning indicated that the contribution of public administrations amounted to 15.4 percent of GDP, a slight decrease of 0.5 points compared with 2016 due to the stagnation of wages.

Total available national income, in turn, increased by 4.7% in 2017 to AED 1124.8 billion. This improvement is due to the increase in gross income available to public administrations by 6.9%, for households and non-profit institutions in the household sector by 4.2% and for companies (financial and non-financial) by 3.2%.

Total household disposable income and purchasing power increased by 4.2 percent to MAD 694.2 billion in 2017, and the share of wages rose by 47.6 percent.

In terms of mixed income, including the total household service surplus, 42.1 per cent of the total household income was net income, social benefits and other net transfers of 26 per cent, while taxes on income, wealth and social contributions A negative 15.8 percent.

With 88 percent of total disposable income allocated to households for final consumption expenditure, the household savings rate fell by 0.1 points to 12.5 percent in 2017.

Household disposable income per capita was AED 1,917 in 2017, compared with AED 19309 in 2016, a rise of 3.1 percent. As a result of the decline in prices in consumption in 2017, which recorded 0.8% instead of 1.6%, household purchasing power improved by 2.3 points.

National savings amounted to 306.9 billion dirhams in 2017, an improvement of 6.7 percent. The breakdown by institutional sector shows that financial and non-financial corporations contribute 52%, followed by households and non-profit institutions in the service of households by 29.3% and public administrations by 18.7%.

Total fixed capital formation amounted to 302.2 billion dirhams in 2017, down by 0.3 percent from 2016; financial and non-financial corporations remain the top contributor by 56 percent

In terms of the need to finance the national economy, it amounted to 39.6 billion dirhams in 2017 and accounted for 3.7% of GDP, instead of 4.3% a year ago. The decrease in the need to finance the national economy is mainly due to a reduction in the funding requirement of public administrations by 7.1 billion dirhams between 2016 and 2017, and an increase in the financing capacity of households, including non-profit institutions for households, by AED 1.3 billion To AED 474 million. In contrast, non-financial companies have seen their financing needs increase from 53.3 billion dirhams in 2016 to 58.5 billion dirhams in 2017.

Non-financial companies are still using bank loans to cover their funding needs, the memo revealed. Net loan flows to these companies reached AED 38.5 billion in 2017, accounting for 44.5% of their commitments.

On the other hand, the internal debt of public administrations witnessed a slight decrease, recording a net flow of 24.4 billion dirhams, with the net issuance of treasury bonds for 2017 against 26.2 billion dirhams in 2016. The external debt of public administrations recorded a net flow of 3.3 billion dirhams, , 8 billion dirhams last year.

Household indebtedness, including self-contractors, increased from AED 10.6 billion in 2016 to AED 17.6 billion in 2017. The net inflow of deposits increased significantly from 21.2 billion dirhams in 2016 to 53 billion dirhams AED in 2017.

The contribution of financial firms to financing the national economy has improved. Thus, the net flow of loans granted by this sector amounted to 34.6 billion dirhams in 2017 instead of 33.9 billion dirhams in 2016. In parallel, the deposits of these institutions amounted to a net flow of 77.5 billion dirhams compared to 66.6 billion dirhams last year .


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