Mr. Jean-François Dauphin, the mission chief for Morocco at the IMF said in the wake of the International Monetary Fund (IMF) publishing the results of its bilateral consultations with Morocco, that the Moroccan government “made commendable efforts to maintain economic stability. In particular, they achieved a significant reduction in the fiscal and external deficits which, as you know, had both widened until 2012 when the economy was hit by a series of external shocks.”
“The reduction in the external deficit was due, in large part, to booming exports from newly developed sectors, including car industries and aeronautics and also later in the year, of course, by the fall in oil prices. International reserves have increased to about five months of imports,” Dauphin stressed.
“The authorities moved ahead with an impressive reform of the subsidy system while they extended support to the most vulnerable through dedicated programs to facilitate access to health and education,” Dauphin added.
“Now, looking ahead, we expect the Moroccan economy to strengthen. In 2015, economic growth is expected to rebound and reach about four-and-a-half percent. Inflation is expected to remain low, around one-and-a-half percent. And the fiscal deficit and external deficit should continue to narrow,” the mission chief for Morocco at the IMF added.
Still, much remains to be done to further reduce economic vulnerabilities and to foster higher growth, reduce unemployment and reduce inequalities. And this, in a context where external risk remains significant. These include the risk of long period of slow growth in Europe which, as you know, is Morocco’s main trading partner, the risk of a renewed spike in world energy prices and the risk of a surge of global financial market volatility.
“The task is not easy and requires a sustained implementation of reforms. The fiscal deficit needs to be further reduced to make sure that the level of public debt goes down. The pension reform is challenging but it needs to be urgently implemented to ensure the viability of the system and to broaden its coverage, which is an important social goal,” Dauphin noted further.
“Reforms to strengthen the competitiveness of the economy are also crucial. These are reforms to improve the business climate, foster greater access to credit for households and small and medium-sized enterprises, improve governance and transparency and invest in infrastructure and education,” the man noted.
“A more flexible exchange rate regime would also help the economy better absorb shocks and support the diversification of economic links to new market. And in addition, there is a need to ensure that the labor market functions in a way that is conducive to private sector job creation,” Dauphin closed.
The Moroccan Times.
