The International Monetary Fund (IMF) has approved $2.9 billion for Morocco Under the Precautionary and Liquidity Line (PLL) that will provide insurance against external risks, support Moroccan efforts to reduce fiscal, external vulnerabilities and promote more inclusive growth.
Despite a sharp pick up in global oil prices, Moroccan authorities have reduced fiscal and external vulnerabilities and implemented important reforms with the support of three consecutive 24-month PLL arrangements, said the IMF.
The new PLL arrangement will provide insurance against external shocks and support the authorities’ efforts to further strengthen the economy’s resilience and promote higher and more inclusive growth.
The PLL was introduced in 2011 to meet more flexibly the liquidity needs of member countries with sound economic fundamentals and strong records of policy implementation but with some remaining vulnerabilities.
“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”, said Mr. Mitsuhiro Furusawa, IMF Deputy Managing Director.
“Morocco’s 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”, added Mr. Mitsuhiro.
He also said that Morocco’s 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 to increase female labor participation.