The IMF reports on Morocco’s ongoing economic reform successes:
“Morocco’s overall economic performance has continued to improve in 2015. Strong policy implementation has helped reduce fiscal and external vulnerabilities and significant progress has been achieved on reforms. In an environment that remains vulnerable to important downside risks, continued efforts to move ahead with difficult but necessary reforms will be key for reducing the remaining vulnerabilities while promoting higher and more inclusive growth.
“Fiscal developments have been positive and consistent with the authorities’ objective to reduce the deficit to 4.3 percent of GDP in 2015. Substantial progress has been achieved on the subsidy reform, while support to the most vulnerable has expanded. Now that the draft legislation on the public sector pension reform has been approved by the government, its timely adoption by parliament and implementation will be key.
“Progress has also been made in upgrading the financial policy framework, including implementing recent Financial Sector Assessment Program recommendations, in addition to implementing Basel III norms and the new banking law. An important further step should be to finalize the new central bank law in order to enhance its independence and extend its supervisory and resolution powers. Preparations for a more flexible exchange rate regime, which will help preserve competitiveness and the economy’s ability to absorb economic shocks, are progressing well.
“Morocco’s external position has improved considerably, owing mainly to strong policies, rising exports in newly developed sectors, lower oil prices, and robust FDI, with reserves reaching a comfortable level. Structural reforms to improve the business climate and enhance competitiveness continue to be a priority in order to build on those gains. The implementation of the National Strategy for Employment will help address constraints in the labor market and reduce unemployment, especially among the youth.
“The arrangement under the Fund’s Precautionary and Liquidity Line (PLL) remains on track. The PLL, which the authorities continue to treat as precautionary, has provided Morocco with insurance against external risks while supporting the authorities’ economic strategy.”..[FULL STORY]