Casablanca – On Monday, King Mohammed VI received Mr. Abdellatif Jouahri, the Governor of Bank Al-Maghrib, at the Royal Palace in Tetouan. During this audience, Mr. Jouahri presented the Central Bank’s annual report on Morocco’s economic, monetary, and financial situation for the fiscal year 2023.

Economic growth amidst challenges

In his address to the King, Mr. Jouahri highlighted a notable improvement in the national economy despite a challenging international environment, successive years of drought, and the violent earthquake that struck the Al-Haouz region. The economy achieved a growth rate of 3.4% for the year. This growth, however, was shadowed by a loss of approximately 157,000 jobs, mainly in the agricultural sector, with other sectors showing relative improvements that were insufficient to offset this decline.

Inflation and monetary policy

Mr. Jouahri reported that inflation peaked at 10.1% in February before gradually decreasing to an annual average of 6.1%, down from 6.6% in 2022. This reduction was attributed to both the weakening of external inflationary pressures and effective governmental measures coupled with a tightened monetary policy by Bank Al-Maghrib. The Central Bank continued to meet all liquidity demands expressed by banks, contributing to this inflation management.

Public finances and budget deficit

The report underscored progress in budgetary consolidation, with the deficit reducing to 4.4% of GDP. This improvement was driven by strong tax revenue performance, significant returns from innovative financing mechanisms, and resources mobilized through the “Special Fund for Managing the Effects of the Earthquake,” established under Royal Instructions.

External Accounts and Reserves

On the external accounts front, Mr. Jouahri noted that the current account deficit narrowed to 0.6% of GDP. This reduction was supported by the continued momentum of the automotive industry, travel revenue flows, and remittances from Moroccans residing abroad. Official reserves of Bank Al-Maghrib strengthened to $37.05 billion, covering nearly five and a half months of imports.

Reforms and international credibility

Despite various constraints and shocks, Morocco maintained and even expanded its reform agenda and major economic and social projects, thanks to its political and social stability. This stability and credibility as a reliable partner garnered positive evaluations from international institutions, facilitating easier access to financial markets and funding instruments. Additionally, Morocco hosted the annual meetings of the World Bank and the IMF last October, highlighting its growing international stature.

Future challenges and transitions

Mr. Jouahri emphasized the importance of maintaining the current momentum, consolidating gains, and ensuring their sustainability. He outlined several major transitions that Morocco needs to manage successfully, including:

– Social transition: Enhancing social dialogue to contribute more effectively to Morocco’s transition to a social state. This involves improving working conditions, promoting social justice, and reducing inequalities.

– Pension reform: Completing the reform of pension systems, as their balances remain fragile.

– Green economy: Accelerating policies for climate change adaptation and mitigation to establish Morocco as a pioneer in sustainable development.

– Digital transition: Strengthening basic infrastructure, improving education quality, promoting digital culture, and creating a conducive environment for a digital ecosystem. This includes establishing a dedicated fund for Fintechs to support innovation in the financial sector.

Call for collective effort

Mr. Jouahri stressed that the success of these transitions requires significant resources, which the state cannot mobilize alone sustainably. This necessitates the involvement of the private sector and foreign partners. He reaffirmed Morocco’s determination to march towards emergence and prosperity, with public policies focused on development fundamentals such as human capital development, governance enhancement, and business environment improvement, while preserving macroeconomic balances.

 Mr. Abdellatif Jouahri presented His Majesty King Mohammed VI with the Central Bank’s annual report, emphasizing the need to mobilize all active forces in the country with a spirit of seriousness and responsibility, prioritizing national interest as outlined in the King’s Throne Speech last year.