Morocco's macroeconomic situation improved, country to grow 4.7%
The fund indicates an improvement of the macroeconomic situation of the Arab country, driven by a good agricultural season and improvements in construction activity.
The fund points out, however, that nonagricultural growth remains sluggish, including in tourism-related sectors, which are affected by geopolitical risks, and some traditional manufacturing, such as textiles.
According to the report, the current account deficit is expected to narrow to 1.5% of the GDP this year, against 5.7% in 2014. also It says the decline in touristic revenues is being offset by strong phosphate exports and lower energy and food imports.
“As a result and with continued robust FDI, international reserves are now close to 6.5 months of imports”, says the fund.
The IMF says also that Morocco has continued with its fiscal consolidation and that the country appears to be on track to meet the fiscal deficit objective of 4.3 percent of GDP in 2015, down from 4.9% in 2014.
“This reflects lower wage and subsidy spending, thanks to declining oil prices and full implementation of energy subsidy reforms”, it says.
According to the IMF, Morocco's medium-term prospects are favorable. The fund expects an economy growth of 5% by 2020, despite some risks, such as lower growth in the euro zone or increased international oil prices.
Stronger medium term growth, says the IMF, will hinge on continued implementation of comprehensive reforms with regard to labor participation and labor market efficiency, access to finance, quality education, efficiency of public spending and further improvements to the business environment.
The fund also points out that better healthcare coverage, continued poverty reduction and lower regional and gender disparities will be crucial to achieving a sustainable and more inclusive growth. ■