Research from 2015 shows that Moroccan economy made certain strengthening, as well as significant reduction in fiscal and external vulnerabilities. Furthermore, the improving business climate, but also education and infrastructure were the key to creating new jobs and lowering the rates of unemployment and poverty.
All these resulted from Morocco´s significant progress in implementing economic reforms. However, according to IMF, the country needs to continue with their efforts to maintain gains and achieve higher and inclusive growth.
Without a doubt, Morocco made outstanding economic progress, but IMF Mission Chief for Morocco, Jean-François Dauphin, is still afraid that the economy has the possibility to face risks would call for the sustained implementation of reforms.
According to Dauphin, economic imbalances have reduced to a large extent after the shock that hit the economy in 2011-12. The following three years made them reconsider their situation and implement a package of economic reform policies. All these policies were supported by an IMF Precautionary as well as Liquidity Line. As a result, the significant reduction in the fiscal deficit was seen which made them move ahead with a remarkable reform of the subsidy system.
At the same time, the current account deficit has narrowed as well, while the foreign exchange reserves have increased. November 2014 was an important date when the authorities adopted a new organic budget law that had the goal to strengthen and modernise their budget framework. Besides, the government also adopted a new banking law, which expanded the regulatory role of Morocco’s Central Bank as well as its supervisory responsibility.
Even so, at the end of the year, the total unemployment rate remained high at 9.7% while the youth unemployment was around 20%. Authorities in Morocco were required to make further efforts to maintain macroeconomic stability despite the challenging external environment. Their fiscal deficit needed to be reduced in order to set off the public debt into the past, and their pension reform needed to be completed.
Further, they were required to continue with their amazing reforms to strengthen their market by improvements in the business climate, encouragements to the access to credit for households and small and medium-sized enterprises, and finally improvements in governance and transparency, as well as investments in infrastructure and education. With more flexibility to the exchange rate regime, Moroccan government would simultaneously help their economy absorb shocks better, but also support the diversification of economic and financial flows.