By Loubna Flah
By Loubna Flah
Morocco World News
Casablanca, May 30, 2013
The woes plaguing the Moroccan economy are far from being over but indicators are expected to improve in 2013, according to Oxford Group Business, a global publisher and consultancy groups producing business intelligence reports.
Despite a sluggish growth and growing trade deficit, a February assessment by IMF officials hailed Morocco’s sound monetary and financial policies, alongside its positive structural reform efforts, which had provided solid foundations for the current economic program.
That said, many Moroccan economists fear that the structural adjustment programs (SAP) imposed by the IMF are susceptible to worsen the social situation.
It is noteworthy that The IMF Structural Adjustment Programs received worldwide criticism for their compelling measures, namely austerity policies that entail a cut down in public finances in vital sectors, such as education and healthcare.
The IMF revealed good prospects for Moroccan economy for the year 2013. The Fund added that Morocco’s strategy should help navigate the economy through the current challenging times.
But, the figures were quite ominous in the year 2012 with higher oil prices, a poor harvest and a slumbering GDP growth falling to 5% from 3% and a widening trade deficit.
Nevertheless, Morocco’s trade deficit decreased by 5.2% year-on-year (y-o-y) to reach MAD44.79bn (€4.02bn) in the first quarter of 2013 as imports slowed.
However, while Morocco’s economy gave a positive performance in the first quarter of 2013, the country will have to adjust its spending patterns further if it is to rebuild its fiscal and external reserves.
In April, the government cut its 2013 investment budget from MAD180bn (€16.16bn) to MAD165bn (€14.81bn), creating savings of MAD15bn (€1.35bn) in an effort to ease strained public finances.
The move was sharply criticized by the opposition and the press as investment budget a harbingers a large scale austerity policy that remains incongruous with the spirit of social reforms that brought the PJD to power.
The government needs to undertake tough measures to support long-term fiscal stability and growth. But the measures aimed at streamlining public spending could be cost the parties forming the coalition government their popularity especially if the indicators fall again.
© Morocco World News. All Rights Reserved. This material may not be published, rewritten or redistributed