Growth allied to stability give IMF confidence
Morocco’s strength is often overlooked. Investors looking in see an economy projected by the central bank to expand by 3.5% this year and 3.1% in 2019 as well as a narrowing current account deficit, rising foreign exchange reserves and a low rate of unemployment.
It has not suffered a recession since the global financial crisis and its best days appear still to be ahead of it, with the IMF tipping the economy to be growing at closer to 5% a year by 2023.
At the heart of the growth-and-stability story is the veteran financial policymaker Abdellatif Jouahri, now well into in his 16th year as governor of Bank Al-Maghrib.
On the central bank chief’s agenda are keeping inflation at or below its current rate of around 2%, expanding the private sector, boosting social inclusion and sucking in more long term foreign direct investment.
In September 2018, Bank Al-Maghrib kept its benchmark interest rate unchanged at 2.25% saying borrowing costs were consistent with growth prospects and inflation targets.
The North African nation has two main stated aims. The first is to transform itself into the region’s leading business hub in large part by investing in physical infrastructure, industrial innovation and skills training. And the second is to allow the dirham to fully float. The latter is a much longer term aim: Jouahri reckons the process may take up to 15 years. But Morocco has already taken its first step, allowing its currency from January 2018 to trade 2.5% on a daily basis above or below the official peg. The move is designed to give the economy more protection from external shocks, raise competitiveness and boost exports and tourism revenues.