Morocco’s economic growth is expected to reach 2.8 percent in 2019 as a result of a contraction in agricultural production and a moderate recovery in non-agricultural activity, said Nicolas Blancher, head of the International Monetary Fund team (IMF) which carried out a mission in the Kingdom from October 29 to November 7, 2019 focused on the second review of the agreement under the Precautionary and Liquidity Line (PLL).
Overall, the economic policy is sound and Morocco’s economic fundamentals are solid, said Blancher, noting that Morocco’s macroeconomic policy and results remain solid, despite the volatility of cereal production, the weak growth of key partners country’s trade and high external risks.
According to IMF projections, inflation would slow to 0.4 percent and the fiscal deficit for 2019 is expected to reach 4 percent of GDP, due to higher capital spending than revenue. Noting that unemployment stood at 9.4% in the third quarter of 2019 and the participation rate at 44.9%.
In this context, the external current account deficit is expected to be reduced to about 5.1 percent of GDP in 2019 and gross international reserves are expected to reach $ 25.5 billion by the end of 2019, or about 5.2 months of imports. He further assured that Morocco is also committed to the pathways of optimizing the management of public assets, continuing the rationalization of operating expenses and strengthening the efficiency of investment spending, adding that these efforts will increase the fiscal space needed for public investment and social programs to reduce public debt to 60 percent of GDP in the medium term.
The IMF’s Executive Board approved the PLL agreement for Morocco in the amount of $ 3 billion in December 2018. The Moroccan authorities have not made any draws for this purpose. and intend to continue to view this agreement as a precautionary agreement.