By Loubna Flah
Morocco World News
Casablanca, July 23, 2013
The latest report issued by Morocco’s central bank, Bank Al Maghrib, does not bring solace in the midst of a political crisis prompted by the withdrawal of the Istiqlal Party from the coalition government.
Bank Al Maghrib’s report heralds dire prospects for the Moroccan economy. The report pinpoints that the government failed to carry out substantial social reforms that were expected to improve the living standards and to deal with rampant unemployment.
The report points out that the international institutions may consider downgrading Morocco’s ranking at several levels due to delayed reforms and faltering indexes.
In his interview to the Moroccan daily Al Massae, the economic expert Hammad Kassal warned against a potential blank year in 2014 due to pending policies especially those concerning the compensation fund and the tax reform.
He added that the current difficult juncture is likely to delay the promulgation of the finance law. The finance law is much awaited by investors since it gives more visibility about major economic priorities and the orientations in public spending.
Kassal asserted that Morocco is entering another stagnation phase marked by a steep decrease in domestic demand for petroleum products in addition to an abrupt drop in demand for building material and a fall in the amount of loans attributed to Morocco by international institutions.
Mr. Kassal predicted that the negotiations between the Party of Justice and Development (PJD) and the National Rally of Independents (RNI) would not yield the expected results since the latter will ask for key ministerial positions that PJD is unlikely to concede. Thus, the political crisis is likely to cast its shadows on the national economy and bring about more confusion in the business circles, he noted.
Based on the foregoing, the political crisis is likely to dissuade businessmen to invest their capital and resort to assets withdrawals. Any massive withdrawal of assets is likely to worsen the liquidity crisis that has been plaguing the banking sector for the past year.
Abdelatif Al Jawahiri, Bank Al Maghrib’s governor has repeatedly urged the government to accelerate the implementation of the promised reforms to face the challenges facing the national economy and to restore the macroeconomic balances.
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