São Paulo – Morocco needs to promote inclusion of its population in the structural reforms that are taking place in its economy. This is one of the recommendations made by technicians of the International Monetary Fund (IMF) who visited the country this month for the first review of a US$ 6.3 billion loan made available in August 2012.
By the agreement, the country may withdraw the funds to balance its accounts in case of external shock. The line of credit, called Precautionary Liquidity Line (PLL) is granted, according to the IMF, to countries with solid economic structures that are, however, vulnerable to international crises.
According to the IMF evaluation, over the last ten years Morocco adopted a “safe” macoreconomic policy that has resulted in solid growth, low inflation and less poverty. However, fund technicians stated that unemployment among the young population remains high and that Morocco should concentrate on promoting inclusive growth.
“The PLL arrangement will continue to support the authorities’ home-grown reform agenda aimed at achieving higher and more inclusive economic growth,” says the institution’s press statement.
The IMF deputy managing director and acting president, Nemat Shafik, stated that the government is still engaged to maintain fiscal stability with the budget this year and stated that it is important for the country to advance in reforms like that of the social service system. “It is necessary to preserve fiscal space to support greater and more inclusive growth,” stated the Fund executive.
The IMF statement also recommended that Morocco prepare itself for external shocks and added that the country should adopt a more flexible exchange rate to increase its competitiveness abroad.
“Over the past decade, substantial progress has been made in improving social indicators. However, sustained further efforts are still needed to increase growth and make it more inclusive, notably by boosting employment, in particular of the youth, reducing income inequalities, and increasing access to health care and education,” says the Fund’s press statement.
*Translated by Mark Ament
