BAM Governor presents to King 2023 financial year report on economic, monetary, financial situation
King Mohammed VI, accompanied by Crown Prince Moulay El Hassan and Prince Moulay Rachid, received, on Monday at the Royal Palace in Tetouan, Abdellatif Jouahri, Governor of the Central Bank (Bank Al-Maghrib), who presented to the Sovereign the Bank’s annual report on the economic, monetary, and financial situation for the 2023 financial year.
In his address before the King, Jouahri said that despite a difficult international environment, successive drought years, and the violent earthquake that shook Al-Haouz region, the national economy grew by 3.4% this year.
In terms of consumer price evolution, and after a peak of 10.1% in February, inflation gradually declined, ending the year with an average of 6.1% compared to 6.6% in 2022, Jouahri noted, stressing that in addition to the weakening of external inflationary pressures, this evolution is the result of the measures taken by the government and the tightening of monetary policy by Bank Al-Maghrib, which continued in parallel to meet all the liquidity requests of the banks.
Regarding the labor market, Jouahri said the situation remained difficult in 2023, with a loss of around 157,000 jobs, reflecting significant declines in the agricultural sector. The other sectors recorded a relative improvement but which was insufficient to compensate for the decline in agricultural employment, he noted.
As for the public finance, Jouahri stressed that the budget recovery process continued, with the deficit returning to 4.4% of GDP, thanks to the good performance of tax revenues and significant revenues from innovative financing mechanisms, in addition to the resources mobilized through the “Special Fund for Earthquake Impact Management” set up on High Royal Instructions.
In terms of external accounts, the Central Bank governor stated that the current account deficit narrowed to 0.6% of GDP, thanks to the continued momentum of the automobile industry, travel revenue flows and remittances from Moroccans residing abroad. Bank Al-Maghrib’s official reserve assets have thus increased to 359.4 billion dirhams, equivalent to nearly 5 and a half months of imports, Jouahri noted.
He added that despite the constraints and successive shocks, Morocco, which boasts political and social stability, has maintained and even expanded its reform agenda and its structuring economic and social projects. This orientation, combined with its credibility as a reliable partner, has earned it positive evaluations from international institutions, easier access to financial markets and financing and precautionary instruments, in addition to hosting the annual meetings of the World Bank and the IMF last October, he noted.
For the Central Bank governor, the challenge today is to maintain this momentum, consolidate the achievements and ensure their sustainability. To do this, the country shall manage and succeed in some major transitions, initiated by the King, Jouahri said.
Thus, and for a greater contribution of social dialogue to Morocco’s transition to a social state, Jouahri considers that it would be more judicious and equitable for it to be based on an approach that takes into account, in addition to improving working conditions, social justice and reducing inequalities. He also recalled the importance of completing the reform of pension systems, at a time when their balances remain fragile.
He also affirmed that a successful transition to a green and sustainable economy requires, beyond emergency solutions, which are certainly necessary, accelerating policies for adaptation and the fight against climate change and strengthening their effectiveness and coherence to consolidate Morocco’s place among the pioneers in this field.
Regarding digital transition, Jouahri said that on the eve of the launch of a new strategy, the success of this project remains dependent on the strengthening of basic infrastructure, particularly public, the improvement of the quality of education, the promotion of digital culture and the creation of an incentive environment conducive to the emergence of a digital ecosystem.
In this context and in the financial field in particular, the governor announced that the Central Bank plans to set up, in collaboration with stakeholders, a Fund dedicated to Fintechs to provide project leaders with financial support and assistance for their implementation.
He also stressed that the success of all of these transitions requires significant resources that the State cannot mobilize alone in a sustainable manner, which could require the involvement of the private sector and foreign partners.
Jouahri argued that Morocco is determined to continue its march towards emergence and prosperity and that the achievement of this great transition requires maintaining the refocusing of public policies on the fundamentals of development. These are the development of human capital, strengthening governance, improving the business environment in parallel with the preservation of macroeconomic balances. It also requires the mobilization of all the country’s vital forces in a spirit of seriousness and responsibility, prioritizing above all the national interest, in accordance with the call made by the King in last year’s Throne Speech.
