São Paulo – Morocco must implement key reforms so it can face up to external pressure and eventually a change for the worse in the international economic scenario. The assessment was given by Jean-François Dauphin, who led a mission of the international Monetary Fund (IMF) to the country from December 5th to 18th. The mission aimed to evaluate the Moroccan situation following the approval of a US$ 6.2 billion loan in August this year.
“Morocco has made substantial progress in strengthening growth and reducing poverty over the past decade. But despite such progress, much remains to be done to reduce unemployment, in particular among the youth, and further improve social indicators such as the literacy rate and equal access to basic infrastructure, health services and education. In this context, structural measures to promote higher and more inclusive growth, through product and labor markets reforms, investment in human and physical capital, and improvement of the business climate are needed,” said Dauphin in an IMF press statement.
According to the executive, Morocco was recently hit by Europe’s deteriorating economic scenario, high oil and food prices, and a below-average agricultural output in 2012. According to Dauphin, the Gross Domestic Product (GDP) growth this year should be around 3%, even though non-agricultural sectors are expected to grow by 4.5%. The Moroccan current account deficit is expected to exceed 8% of the GDP.
“In the context of a difficult external environment, improving competitiveness is a necessity. To fully reap the benefit of the authorities’ efforts to increase export market and product diversification and attract further foreign direct investment, structural reforms to improve the business climate and investment in education and training are necessary. Looking ahead, a more flexible exchange rate regime would strengthen the contribution of structural reforms to greater competitiveness and absorption of external shocks,” said Dauphin.
Dauphin also stated that the Moroccan banking sector remains strong in spite of the global crisis, and noted that continuing efforts to foster financial access, especially in rural areas, would help widen access to credit, particularly for small and medium enterprises, and contribute to higher and more inclusive growth.
*Translated by Gabriel Pomerancblum
