The IMF has released $496 million in funding for Morocco following a review under its RSF program, highlighting the country’s economic resilience. Despite the impact of a severe earthquake and high unemployment, Morocco’s GDP is projected to grow, aided by structural reforms and infrastructure projects.
The International Monetary Fund (IMF) has approved $496 million in funding for Morocco, reflecting the country’s resilience amid economic challenges. Kenji Okamura, the IMF’s deputy managing director, noted Morocco’s effective economic policies during this funding announcement, which follows the completion of its third review under the Resilience and Sustainability Fund (RSF) arrangement. To date, the total disbursement under this agreement has reached approximately $1.24 billion.
This RSF arrangement, initiated in September 2023, aims to assist Morocco’s transition towards a green economy and enhance its preparedness for natural disasters. This support followed a devastating earthquake that resulted in nearly 3,000 fatalities, marking the country’s worst seismic event in over sixty years.
The IMF anticipates that Morocco’s economic growth will moderately decline to 3.2% in 2024, even as the country continues to grapple with recurring drought conditions. Projections indicate that GDP growth could stabilize at 3.7% in the coming years, buoyed by structural reforms and infrastructure developments essential for stronger economic performance.
Despite these positive indicators, the IMF expressed concern regarding high unemployment rates at approximately 13%, particularly within the agricultural sector. However, inflation has decreased, allowing for lower interest rates; the central bank recently reduced rates to 2.25% from 2.5%, with expectations for inflation to stabilize at around 2% over the next two years.
During a mission to Rabat, IMF representatives emphasized the necessity of structural reforms targeting job creation and recognized the enhancements made to Morocco’s tax system for including climate change risk assessments.
The third review under the RSF program marked a significant milestone, with six out of the seven planned measures being implemented. These measures include better management of water resources and further liberalization of the electricity sector to address climatic impacts on fiscal stability. However, the planned introduction of a carbon tax was postponed pending additional analysis by Moroccan authorities.
The IMF’s approval of $496 million in funding for Morocco reflects the nation’s resilience and robust economic policies following significant challenges, including a recent seismic disaster. The RSF arrangement aims to bolster the transition to a green economy, although unemployment and agricultural losses remain pressing challenges. Continued focus on structural reforms and infrastructure investment is essential for sustainable economic growth in Morocco.
Original Source: www.thenationalnews.com
