Too early to forecast Al Haouz quake’s effect on economy

Too early to forecast Al Haouz quake’s effect on economy

The Governor of Morocco’s Central Bank (Bank Al-Maghrib – BAM), Abdellatif Jouahri, said on Tuesday in Rabat that it’s still too early to judge the real impact of Al Haouz earthquake on the national economy.

“It’s still early to form a judgement. An in-depth analysis is being carried out to measure the impact of the earthquake on various sectors of activity,” he said at a press briefing held at the end of BAM’s third quarterly Board meeting for 2023.

In his view, the impact on growth, the budget and the balance of payments cannot be assessed now, underlining the importance of taking the necessary hindsight to be able to identify the most suitable financing component.

On this occasion, Jouahri reiterated the Central Bank’s commitment to supporting the government’s efforts and making its contribution to sustaining the sectors of the economy that will suffer from the effects of the earthquake.

BAM Governor also highlighted the post-earthquake situation, pointing out that the experiences of other countries hit by natural disasters have shown a recovery in economic activity, notably through boosting certain sectors such as construction and public works as well as tourism.

“This assessment basically and initially led to the fact that the agricultural and tourism sectors are the most widespread in the areas of the Al Haouz province and the neighboring areas affected,” noted the governor.

The royal emergency program to handle the disaster’s repercussions will cost MAD 120 billion over a period of five years, or around 10% to 11% of Morocco’s gross domestic product (PIB).

The BAM governor is optimistic that the reconstruction effort would “contribute to a steady increase in the construction and public works sector, in parallel with the recovery of tourism in the coming peak seasons.”

“Morocco’s external public debt remains at generally low levels; This allows a greater margin in negotiations with international financial institutions, most notably the International Monetary Fund,” according to Jouahri.

The International Monetary Fund and the World Bank will hold their annual meetings in Morocco, which will discuss “the pattern of governance and organization of international financial institutions in light of Divisions and rethinking of the new global blocs,” in addition to “the issues of the debts of the countries of the African continent and the representation of Africa in global economic institutions.”

“The IMF anticipated these discussions by putting together a comprehensive book/report on Morocco and its economy,” according to Jouahri.

The supply crisis, which was the primary contributor to inflation in Morocco, has actually started to decline;” said Jouahri.

 However, uncertainty in fuel price trading and geopolitical balances, as well as their effects on maintaining a balance between supply and demand in the markets, remain present.


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