Morocco’s economy to grow 6.3% in 2021, IMF says

Workers sort and clean saffron flowers during their processing in the town of Taliouine, Morocco. The country’s economy is forecast to grow around 3 per cent in 2022. Photo: AFP

Morocco's economy is set to grow 6.3 per cent in 2021, registering one of the highest growth rates in the Middle East and North Africa region, after shrinking at the same level last year, according to the International Monetary Fund.

The country’s economy is rebounding from the impact of the coronavirus pandemic owing to a successful vaccination programme, growth of exports, high agricultural output, buoyant remittances and fiscal stimulus measures, the IMF said at the end of its staff mission.

“The economic recovery is expected to continue over the next few years, although the pandemic will leave some scars,” the Washington lender said. “GDP growth is projected at around 3 per cent in 2022, as agriculture output returns to average levels and non-agricultural activity continues to recover.”

The country’s current account deficit is projected to return to pre-pandemic levels this year and stabilise at 3.5 per cent of the gross domestic product over the medium term, according to the IMF. Morocco is also emerging from the pandemic with “a much stronger international reserve position”.

Morocco has conducted a successful vaccination campaign. As of Saturday, the country had administered about 49.1 million doses, covering more than 64 per cent of its total population, according to the Bloomberg vaccine tracker.

The recent “inflationary pressures have remained manageable and are expected to wane in the medium term, as cost pressures from global supply disruptions are reabsorbed”, the IMF said.

Despite the expected reduction of fiscal deficit for 2021, the country should continue focusing on reducing the overall fiscal deficit further and bring the debt-to-GDP ratio “closer to its pre-pandemic levels over the medium term.”

“This will require both further changes to the tax system ... and continued efforts to rationalise and optimise public spending,” it said.

Last year, the Moroccan authorities availed funds worth $3 billion under the IMF's Precautionary and Liquidity Line programme to cope with the pandemic.

Moroccan banks have also weathered the pandemic crisis well owing to strong support from Bank Al-Maghrib, the kingdom’s central bank, the lender said.

The BAM should keep ensuring that banks “continue provisioning against impaired loans, while accelerating the development of a distressed debt market together with other relevant authorities”, it added.