“Despite Morocco's strengthened external positioning owing to its stability, its internal performance remains insufficient,” Jouahri said.
Rabat – King Mohammed VI received on Wednesday in Tetouan Abdellatif Jouahri, the wali (governor) of Morocco’s central bank, Bank al-Maghrib. Jouahri presented the bank’s 2019 report on Morocco’s economic, monetary, and financial situation.
Due to an “adverse external environment and poor weather conditions,” domestic economic growth slowed to 2.5% in 2019, Jouahri said before meeting the King on the eve of Throne Day, July 29.
According to Morocco’s state media, the Bank al-Maghrib wali added that Morocco’s unemployment rate declined to 9.2%, attributing this to the creation of jobs in the services sector.
Morocco’s budget deficit increased to 4.1% of GDP, in 2019 while the current account deficit stood at 4.1%. Inflows of foreign direct investments amounted to MAD 33.5 billion ($3.58 billion).
Official reserve assets, Jouahri continued, “amounted to the equivalent of 6 months and 8 days of imports.”
Meanwhile, inflation decreased to 0.2% in 2019. Jouahri said this mainly reflects lower food and fuel prices.
Accommodation and reform
The wali went on to explain that Bank Al-Maghrib maintained the “accommodative stance” of its monetary policy, Morocco’s state media reported.
The central bank broadened its “unconventional measures” and reduced the monetary reserve rate to 2%, helping to lower interest rates and accelerate bank lending, he explained.
Jouahri said 2019 was “marked by the momentum generated by [King Mohammed VI’s] call to support and finance SMEs, young project initiators, and graduates.”
In response, the Moroccan government, Bank Al-Maghrib, and the banking system “drew up an ambitious program focused mainly on creating new guarantee funds.” The central bank also introduced a “limitless refinancing mechanism at a preferential rate of 1.25%.”
The wali commended the first phase of foreign exchange market reform, saying its success has allowed economic authorities to launch the second phase.
King Mohammed VI’s push for development
“Despite Morocco’s strengthened external positioning owing to its stability, its internal performance remains insufficient,” Jouahri said. This shortcoming prompted King Mohammed VI to set up the Special Commission on the Development Model.
For Morocco’s economy to achieve resilience, Jouahri called for enhancing its competitiveness and accelerating its growth. “Major, integrated, and consistent next-generation sectoral plans should be put in place to serve as the backbone of the new development model.”
The Bank al-Maghrib wali outlined “cross-cutting reforms” that Morocco should pursue to support the new development model. He listed the new investment charter, the deployment of the new framework for public-private partnerships, the advanced regionalization process, and reforms of the civil service and pension systems as priorities.
Responding to the COVID-19 crisis
It is necessary to speed up the establishment of a legal and regulatory framework to implement the environment charter’s guidelines, Jouahri continued.
According to Morocco’s state media, he stressed that the current economic crisis brought on by COVID-19 is “an occasion to value the range of benefits of the new technologies and to recognize the need to accelerate the implementation of a comprehensive digital strategy.”
The Bank al-Maghrib wali highlighted King Mohammed VI’s “insightful vision” in guiding Morocco’s response to the COVID-19 pandemic. The response has helped Morocco contain the pandemic and mitigate its impact.
Jouahri said the Special Commission on the Development Model should contribute to shaping a new post-crisis vision of Morocco’s economy.
“The mobilization of the nation’s vital forces behind [King Mohammed VI] will preserve and consolidate the achievements of the kingdom and enable it to emerge from this crisis more willing to continue its endeavor towards accelerated, sustainable, and inclusive growth,” the Bank al-Maghrib wali concluded.