Washington The Executive Board of the International Monetary Fund (IMF) approved a Precautionary and Liquidity Line (PLL) arrangement for Morocco that will provide insurance against external risks, and support the authorities' policies to reduce fiscal and external vulnerabilities and promote higher and more inclusive growth.
IMF Executive Board said in a statement on Monday that further fiscal consolidation in Morocco will help lower the public debt to GDP ratio over the medium term while securing priority investment and social spending. It added that reforms of education, governance, the labor market, and continued improvement in the business environment will be essential to raise potential growth and reduce high unemployment levels, especially among the youth and women.
The Executive Board explained that under the PLL twoyear arrangement, Morocco will be granted $2.97 billion (about 240 percent of the country's quota). The access under the arrangement in the first year will be equivalent to $1.73 billion (140 percent of quota).
Morocco has made significant strides in reducing domestic vulnerabilities in recent years. Growth remained robust in 2018 and is expected to accelerate gradually over the medium term, subject to improved external conditions and steadfast reform implementation," said IMF Deputy Managing Director Mitsuhiro Furusawa.
He added that external imbalances have declined substantially, fiscal consolidation has progressed, and the policy and institutional frameworks have been strengthened, including through the implementation of the recent Organic Budget Law, stronger financial sector oversight, a more flexible exchange rate regime, and an improved business environment.
Nevertheless, Furusawa said, the outlook remains subject to external downside risks, including heightened geopolitical risks, slow growth in Morocco's main trading partners, and global financial market volatility. In this context, a successor PLL arrangement with IMF will provide valuable insurance against external risks, and support the authorities' policies aimed at further reducing fiscal and external vulnerabilities and promoting higher and more inclusive growth.
Building on progress made under past PLL arrangements, further fiscal consolidation will help lower the public debt to GDP ratio over the medium term while securing priority investment and social spending," he noted.
Source: International Islamic News Agency