King Mohammed VI, accompanied by Crown Prince Moulay El Hassan and Prince Moulay Rachid, received Abdellatif Jouahri, Governor of Bank Al-Maghrib (BAM), at the Royal Palace in Tetouan on Monday.
During the reception, Jouahri presented to the monarch the annual report of the Central Bank, outlining the economic, monetary, and financial situation for the fiscal year 2023.
Economic Overview
In his speech, Jouahri highlighted Morocco’s resilience in maintaining an upward economic trajectory despite several significant challenges.
Despite the adverse international climate, consecutive years of drought, and a violent earthquake that shook the Al-Haouz province, the national economy grew at a rate of 3.4% in 2023, he noted.
This growth reflects Morocco’s strategic efforts to bolster key sectors such as automotive manufacturing and technology.
However, the report cautions that global uncertainties, including geopolitical tensions and fluctuating commodity prices, continue to pose risks.
Inflation Trends
Jouahri addressed the inflation situation, stating that after peaking at 10.1% in February 2023, inflation gradually receded to an average of 6.1% by the end of the year.
This improvement was attributed to waning external inflationary pressures, alongside tightened monetary policies and government measures aimed at stabilizing prices.
The easing of inflation was significantly supported by effective fiscal policies and strategic government interventions, such as subsidies for essential goods and energy, he explained.
Labor Market
Despite the positive momentum in the overall economy, Jouahri emphasized that the labor market continued to struggle in 2023.
The prolonged drought negatively impacted the agriculture sector, resulting in the loss of 157,000 jobs.
While other sectors such as services and manufacturing have created jobs, they have not fully compensated for the agricultural losses.
Public Finance and Fiscal Policies
Morocco continued its quest for fiscal consolidation in 2023, aiming to reduce public debt through prudent fiscal management.
The fiscal deficit was reduced to 4.4% of GDP, supported by strong fiscal revenue performance and substantial inflows from innovative financing mechanisms.
Resources mobilized through the “Special Fund for Managing Earthquake Effects,” established under royal instructions, also played a critical role.
External Accounts
Jouahri reported a narrowing of Morocco’s current account deficit to 0.6% of GDP. This improvement was driven by robust growth in the automotive industry, increased travel revenue flows, and remittances from Moroccans residing abroad.
As a result, Bank Al-Maghrib’s official reserve assets strengthened to MAD 359.4 billion ($35.9 billion), equivalent to nearly five and a half months of imports.
Strategic Economic Reforms
Morocco has maintained and even expanded its reform agenda despite economic challenges.
This approach, combined with the country’s reputation as a reliable partner, has earned it positive ratings from international institutions, facilitating easier access to financial markets and precautionary instruments.
In addition to hosting the annual meetings of the World Bank and the IMF last October, Morocco continues to position itself as a key player in regional and global economic arenas.
For the Governor of Bank Al-Maghrib, the challenge now is to sustain this momentum, consolidate gains, and ensure their sustainability.
To achieve this, the country must manage and succeed in several major transitions the King has initiated, Jouahri stated.
Central bank recommendations
The Governor outlined several strategic recommendations for Morocco’s future economic trajectory.
Jouahri emphasized the need to make social justice and reducing inequalities central to the country’s transition toward a social state, citing the importance of financial stability for all citizens.
He further highlighted the significance of transitioning to a green and sustainable economy.
Beyond necessary emergency solutions, Morocco must accelerate climate change adaptation and mitigation policies to solidify its position as a pioneer in environmental innovation.
Digital transition
Jouahri assured that on the eve of launching a new strategy, the success of this project depends on strengthening basic infrastructure, improving education quality, promoting digital culture, and creating a digital-friendly climate.
In this context, particularly in the financial sector, the Governor of Bank Al-Maghrib announced that the Central Bank plans to establish, in collaboration with stakeholders, a fund dedicated to Fintechs to provide project promoters with financial support and assistance for their implementation.
He further highlighted that successfully navigating these transitions requires substantial resources that the State cannot sustainably mobilize alone, which may necessitate the involvement of the private sector and foreign partners.
Jouahri also affirmed that Morocco is steadfastly progressing toward emergence and prosperity and that achieving this major transition necessitates maintaining the refocus of public policies on development fundamentals.
This includes human capital development, governance strengthening, and improving the business environment while preserving macroeconomic stability.
It also requires mobilizing all of the country’s active forces in a spirit of seriousness and responsibility, prioritizing national interest above all, in line with the call made by the King in His Throne Speech last year.