Arrangement provides "useful insurance against exogenous shocks" for country
Morocco continues to meet the criteria for a precautionary credit line, approved last year under a two year agreement for US$6.2bn, the International Monetary Fund (IMF) said.
The arrangement provides "useful insurance against exogenous shocks" for the North African country and welcomed its authorities’ intention to continue to treat the PLL (Precautionary and Liquidity Line) as precautionary, directors from the Washington-based organisation said in a report released on Tuesday.
The PLL was introduced in 2011, when protests swept across the Arab world toppling four leaders. The aim of facility is to provide liquidity to countries pursuing sound economic policies which may be adversely affected by economic and financial stress at regional or global levels.
The IMF urged the government to step up efforts to "foster higher and more inclusive growth, including by boosting youth employment and reducing inequalities in income and in access to health care and education." It also called on the government to press on with reforms of its subsidy and pension systems.
The organization's directors emphasized the importance of continued structural reforms by the government to increase the competitiveness and diversify and the export base of the country. The organisation said small and medium-sized enterprises were crucial to accelerate private sector-led growth and welcomed measures to improve the business climate.
The IMF said "the outlook hinges on the timely and sustained implementation of the reform agenda".
The North African country's economy is projected to expand 4.5 percent this year after slowing to 3.2 percent in 2012 from 5 percent the previous year. Inflation is forecast to increase to 2.5 percent this year from 2.3 percent in 2012.