Front Matter

Front Matter Page

IMF Country Report No. 15/43

MOROCCO

2014 ARTICLE IV CONSULTATION—STAFF REPORT; PRESS RELEASE; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR MOROCCO

February 2015

Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. In the context of the 2014 Article IV consultation with Morocco, the following documents have been released and are included in this package:

  • The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on February 6, 2015 following discussions that ended on November 17, 2014 with the officials of Morocco on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on January 23, 2015.

  • An Informational Annex prepared by the IMF.

  • A Press Release summarizing the views of the Executive Board as expressed during its February 6, 2015 consideration of the staff report that concluded the Article IV consultation with Morocco.

  • A Statement by the Executive Director for Morocco.

The document listed below has been or will be separately released.

  • Selected Issues Paper

The policy of publication of staff reports and other documents allows for the deletion of market-sensitive information.

Copies of this report are available to the public from

International Monetary Fund • Publication Services

PO Box 92780 • Washington, D.C. 20090

Telephone: (202) 623-7430 • Fax: (202) 623-7201

E-mail: publications@imf.org Web: http://www.imf.org

Price: $18.00 per printed copy

International Monetary Fund

Washington, D.C.

© 2015 International Monetary Fund

Front Matter Page

MOROCCO

STAFF REPORT FOR THE 2014 ARTICLE IV CONSULTATION

January 23, 2015

KEY ISSUES

Context. The Moroccan authorities have taken strong policy actions to reduce the vulnerabilities of the economy, but important challenges remain to strengthen growth, reduce unemployment, and tackle poverty. Real GDP growth slowed in 2014, hampered by negative agricultural output growth and the impact of weak external demand, but economic activity is showing signs of recovery. Inflation has remained low. The fiscal deficit was reduced as planned; and the external current account deficit is narrowing, leading to a buildup of international reserves. Nevertheless, vulnerabilities remain in the external and fiscal sectors. The financial system remains sound.

Outlook and risks. Subject to steadfast implementation of reforms, and assuming a continued recovery of external demand, real GDP growth is projected to increase, starting in 2015, and to stabilize over the medium term in the 5-5½ percent range. Inflation is expected to remain low at about 2 percent. The external position should continue to improve. While the medium-term outlook is favorable and risks have decreased, they remain substantial, particularly because of Morocco’s strong ties to the euro zone, which make it vulnerable to a protracted period of slow growth in that region.

Policy discussions. Morocco has made important strides in maintaining macroeconomic stability in a difficult environment; nonetheless, more efforts are needed to reduce external and fiscal vulnerabilities, achieve higher and more inclusive growth, and further reduce poverty. The period ahead provides an opportunity to consolidate gains in macroeconomic stabilization and “aim higher and try harder” to build a better future; hence, the discussions focused on: (i) the appropriate policy mix to continue rebuilding policy buffers; (ii) the adaptation of the policy framework to strengthen the economy’s resilience and adaptability; and (iii) fiscal, business environment, and labor market structural reforms to boost the country’s potential beyond the pre-crisis level.

Approved By

Adnan Mazareï and Mark Flanagan

The staff team consisted of Mr. Dauphin (head), Mr. Kalonji, Ms. Garcia Martinez, Ms. Fayad (all MCD) and Mr. Ahokpossi (SPR). The discussions took place in Rabat and Casablanca during November 5–17, 2014. Mr. Auclair and Ms. Thompson (all MCD) assisted in the preparation of the report.

The mission met the Minister of Economy and Finance Mr. Boussaïd, the Minister of Labor and Social Affairs Mr. Seddiki, the Minister of Industry, Trade, Investment and e-Economy Mr. Elalamy, the Minister of Agriculture Mr. Akhannouch, the Minister Delegate of the Budget Mr. Azami Al Idrissi, the Minister Delegate of General Affairs and Governance Mr. Louafa, the Minister Delegate of Civil Service and Modernization of Public Administration Mr. Moubdi, Governor of the Central Bank Mr. Jouahri, and other senior officials and representatives of the private sector and civil society. Mr. Daïri (OED) participated in most meetings.

Morocco has not introduced or intensified exchange restrictions, and has not introduced or modified multiple currency practices in line with Article VIII.

Contents

  • BACKGROUND

  • A. Recent Developments

  • B. Outlook and Risks

  • POLICY DISCUSSION

  • A. Policy Mix: Sustaining the Stabilization

  • B. Adapting the Policy Framework to Strengthen the Resilience of the Economy

  • C. Structural Policies in Support of Higher and More Inclusive Growth

  • STAFF APPRAISAL

  • BOXES

  • 1. Implementation of Past Fund Advice

  • 2. Fuel Subsidy Reform

  • FIGURES

  • 1. Real and External Developments

  • 2. Fiscal and Financial Market Developments

  • 3. Inclusive Growth

  • TABLES

  • 1. Selected Economic Indicators, 2011–19

  • 2. Budgetary Central Government Finance, 2011–19 (Billions of dirhams)

  • 3. Budgetary Central Government Finance, 2011–19 (Percent of GDP)

  • 4. Budgetary Central Government Balance Sheet, 2011–19

  • 5. Balance of Payments, 2011–19

  • 6. Monetary Survey, 2011–15

  • 7. Financial Soundness Indicators, 2008–14

  • ANNEXES

  • I. External Sector Assessment

  • II: Public Debt Sustainability Analysis (DSA)

Front Matter Page

MOROCCO

STAFF REPORT FOR THE 2014 ARTICLE IV CONSULTATION—INFORMATIONAL ANNEX

January 23, 2015

Prepared By

The Middle East and Central Asia Department (in Consultation with Other Departments)

Contents

  • RELATIONS WITH THE FUND

  • RELATIONS WITH THE WORLD BANK GROUP

  • STATISTICAL ISSUES

Front Matter Page

Press Release No. 15/66

FOR IMMEDIATE RELEASE

February 23, 2015

International Monetary Fund

700 19th Street, NW

Washington, D. C. 20431 USA

Telephone 202-623-7100

Fax 202-623-6772

www.imf.org