By Loubna Flah
By Loubna Flah
Morocco World News
Casablanca, Nov 13, 2012
The International Monetary Fund issued its Regional Economic Outlook Update in the Middle East and Central Asia last Sunday heralding new predictions for the prospects of Moroccan economy.
The IMF predicts a challenging year for the whole MENA region marked by faltering growth, rising unemployment, continued fiscal and external pressures.
Indeed the pressing social demands ushered in by the Arab uprisings constitute a real challenge for policy makers.
In addition, the delay in the promulgation of substantial reforms makes it difficult for these countries to set their economies on the right path.
In fact, the adjournment of a homegrown reform agenda is susceptible to curtailing the democratic transitions in the Arab Spring countries.
The IMF report reiterated the necessity to provide financial support to these countries to overcome this major upheaval.
It has also predicted a steep rise in inflation in the countries that witnessed the Arab Spring tide including Morocco.
The recovery of their economies is likely to be sluggish. According to the report, “Growth is expected to remain below long-term trends, and unemployment is expected to increase owing to continued anemic external demand, high food and fuel commodity prices, regional tensions and policy uncertainty.”
The IMF forecasts a steep rise in inflation in Egypt and Morocco as both countries try to reduce their large budget deficits by scaling back food and fuel subsidies.
The World Economic Outlook real GDP Growth Projections anticipate growth of 3.6 percent for the whole MENA region by April 2013.
The report noted that the needs for external financing for Morocco will drop from $ 9, 6 billion in 2012 to $ 8,2 billion in 2013. On the other hand the volume of imports will drop from $ 23, 6 billion in 2012 to $ 18, 4 billion in 2013>
The IMF report outlined the adverse outside factors that hinder the prospects for the Moroccan economy, namely sluggish global growth, the recession in Europe, high food and fuel prices and spillover from Syria.
At the national level, domestic uncertainty, ongoing political reforms, the policy response of increased subsidies besides the continued large financing needs remain real obstacles towards a fast-paced recovery.
To curb the negative impact of these aggregate of factors, the IMF recommend that the Arab countries balance social pressures for spending with tightened fiscal and external constraints in addition to laying the foundation for more job-creating growth through enhanced structural reforms.