The International Monetary Fund (IMF) announced on February 9 that Morocco’s economy regained most of the ground lost during the sharp global recession of 2020.
The IMF anticipates a growth rate of 3 % in 2022, with “agricultural production returning to average levels and non-agricultural activity continuing its recovery.”
The IMF said in a statement issued after its Article IV Executive Board consultations with Morocco that “among the factors propelling the rebound are the exceptional harvest after two years of drought, continued fiscal and monetary stimulus, and the persistent buoyancy of remittances.”
“Moroccan banks have weathered the crisis well, thanks to the prompt and exceptional support from Bank al-Maghrib,” the statement added.
The IMF reported that although most of the jobs lost by 2020 will have been recovered, the unemployment rate of 11.8 % is greater than it was before the pandemic due to an increase in female participation in the workforce.
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“Recent inflationary pressures are projected to dissipate over the medium term as cost constraints connected to global supply disruptions subside,” the report reads.
According to the IMF, the current account deficit will rebound this year to a level similar to the pre-crisis period, stabilizing at roughly 3.5 % of GDP in the medium run.
The international organization noted that although there are risks in the prognosis, particularly the pandemic’s progression, effective and timely structural reforms should accelerate growth in the medium term.
Morocco’s current account deficit is recovering to levels close to those before the pandemic, according to the IMF’s Executive Board. The IMF noted that following a sharp decline in 2020, Morocco’s foreign currency reserves have also increased.
The IMF report highlighted Moroccan authorities’ determination to implement a fresh set of structural reforms.
The IMF considers that “the generalization of the social protection system should remove existing gaps in coverage and quality of health care services and strengthen Morocco’s social safety net.” The international organization added that these reforms should foster more inclusive and efficient growth with the full implementation of the Unified Social Register.
Furthermore, the IMF emphasized that public-sector reform should reduce the budget’s financial burden and remove market distortions that hinder private-sector growth.
The IMF concluded that the New Development Model has promising proposals and “recommendations for strengthening the competitiveness of Moroccan firms, improving governance, boosting human capital, and building a more inclusive society.”
