IMF Hails Morocco’s Improving Business Environment

The International Monetary Fund has praised Morocco’s business environment, which continues to improve, particularly with the activation of the Competition Council and the implementation of a new financial inclusion strategy that will help promote competition and support the development of SMEs.

Improved fiscal management and economic diversification have strengthened the resilience of Morocco’s economy, said IMF team in a press release issued Tuesday after a visit to the North African kingdom.

The IMF experts welcomed the reforms aimed at strengthening the governance and efficiency of the public sector and combating corruption, particularly through the adoption of the law on access to information and the publication of the first report on implementation of the national anti-corruption strategy.

“The Moroccan economy continues to benefit from the prudent macroeconomic policies and structural reforms that have been pursued”, said the IMF team, noting that economic growth reached 3 percent in 2018, while inflation rose to 1.9 percent and growth of credit held steady at 3.3 percent.

International reserves remained comfortable at about five months of imports. Growth should stabilize in 2019, supported by the recovery of non-agricultural activity, to reach 4.5 percent over the medium term with the implementation of the structural reforms.

The Fund’s team supports the privatization plan and efforts to refocus public enterprises on their core business. It welcomes the progress made with fiscal decentralization, while emphasizing the need to ensure good governance, transparency, and fiscal discipline at the local level.

The IMF fully supports Morocco’s financial authorities intention to gradually transition to a more flexible exchange rate regime, which should improve the economy’s ability to absorb external shocks and maintain its competitiveness.

IMF Staff has completed 2019 Article IV Consultation and First Review of the Precautionary and Liquidity Line (PLL) Arrangement with Morocco.

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