Morocco’s Top Banker Warns of Struggle to Meet Social Demands

(Bloomberg) -- Morocco’s economy is struggling to cope with rising social demands, Bank al-Maghrib Governor Abdellatif Jouahri said in remarks that underscored the North African nation’s struggle to avert the kind of unrest that has gripped its neighbors.

Jouahari’s comments, after a meeting with King Mohammed VI, came as he outlined the efforts the central bank had made in trying to boost economic growth and curb unemployment at a time when authorities are working to consolidate public finances and preserve the sustainability of the country’s sovereign debt.

“Our country’s economic performances can’t keep up with the growing social demands, despite efforts that were being made,” Jouahri said in a statement from the central bank. Public policy must prioritize the development of Moroccan entrepreneurship and enhance its international competitiveness, he said, adding that this entails reforming education and vocational training.

The governor said that a “temporary recourse to an expansionary fiscal policy may appear to be an appropriate choice in a context of slow growth and increasing social demands, but the level of indebtedness, that requires more vigilance, cannot be ignored.”

Morocco’s economic growth was 3% in 2018, and the state was able to reduce unemployment to 9.8%, Jouahri said.

The IMF earlier this month revised down its forecast for Moroccan economic growth to 3% in 2019 and cut its inflation estimate to 0.6% from 1.4%. The country has a $3 billion, two-year Precautionary Liquidity Line arrangement with the International Monetary Fund that’s set to expire in December 2020.

©2019 Bloomberg L.P.

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