IMF Concludes Article IV Consultation With Morocco

by Lorys Charalambous, Tax-News.com, Cyprus

17 November 2009

The International Monetary Fund issued the following statement on the conclusion of the Article IV Consultation with Morocco, following an official visit to Rabat, led by Mark Lewis, on November 2-13:

“Despite the world economic slowdown, Morocco’s economic performance has remained solid. Real GDP growth was 5.6% in 2008, and is expected to be around 5% in 2009, sustained by strong domestic demand and exceptional agricultural production. Consumer price inflation will drop to less than 2% in 2009, reflecting, among other factors, the decline in world commodities price. The current account deficit is expected to improve, assuming that the recent signs of a rebound continue in the last part of the year.”

“Fiscal policy will appropriately loosen in 2009 and 2010. Over the medium term, fiscal policy should aim to gradually bring the budget deficit below 3% of GDP, without jeopardizing the economic rebound. Important reforms in the public finance area are ongoing, including tax reforms, and efforts to gradually replace the current system of subsidies by targeted measures to assist the low-income segments of the population.”

“The banking sector remains solid, and has largely been untouched by developments in international financial markets. Given the rapid credit growth in recent years, the Central Bank continues to pay close attention to credit quality.”

“Strong and sustained economic growth in Morocco will depend on reforms aimed at increasing the productivity and competitiveness of the economy, and boosting Morocco’s ability to compete on external markets. To these ends, the authorities are undertaking a wide range of reforms, including in the sectors of justice, agriculture, energy, and education. Success in these efforts will raise investment and output, and help address key social challenges, including youth unemployment."

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