{
  "title": "IMF Executive Board Concludes 2020 Article IV Consultation with Morocco",
  "publication": "IMF News, December 23, 2020",
  "sourceUrl": "https://www.imf.org/en/news/articles/2020/12/23/pr20388-morocco-imf-executive-board-concludes-2020-article-iv-consultation",
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  "summary": "Executive Board concluded the Article IV consultation with Morocco on December 18 (announcement dated December 23, 2020).",
  "publishDate": "2020-12-23",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- Executive Board concluded the Article IV consultation with Morocco on December 18 (announcement dated December 23, 2020).\n- Morocco was hit by the global pandemic and a severe drought in 2020; authorities mounted a prompt policy response, including voluntary private and public contributions to the Covid-19 Fund.\n- Precautionary and Liquidity Line (PLL) purchase in April 2020 eased external financing pressures; authorities intend to repurchase part of the amount purchased under the PLL arrangement soon."
    },
    {
      "heading": "Economic impact and outlook",
      "content": "- Real GDP growth:\n  - IMF staff expects GDP growth to fall to -7.2 percent in 2020 and rebound to 4.5 percent in 2021.\n- Labor market:\n  - Unemployment increased to 12.7 percent in the third quarter of 2020 (from 9.4 percent last year).\n  - Table projection: Unemployment (%): 2017: 10.2; 2018: 9.8; 2019: 9.2; 2020: 12.5; 2021: 10.5; 2022: 9.7; 2023: 9.1; 2024: 8.7; 2025: 8.5.\n- Inflation:\n  - Inflation has been driven lower so far in 2020.\n  - Table (end of period inflation): 2017: 1.7; 2018: 0.1; 2019: 1.0; 2020: 0.2; 2021: 0.8; 2022: 1.2; 2023: 1.6; 2024: 1.8; 2025: 2.0."
    },
    {
      "heading": "Fiscal position and public finances",
      "content": "- Deterioration of the fiscal position in 2020 mainly driven by the fall in tax revenues and greater public sector spending financed by the Covid-19 Fund contributions.\n- Fiscal aggregates (central government, include grants):\n  - Revenue (% GDP): 2017: 26.6; 2018: 26.1; 2019: 25.6; 2020: 26.9; 2021: 26.2; 2022: 26.4; 2023: 26.8; 2024: 27.2.\n  - Expenditure (% GDP): 2017: 30.1; 2018: 29.9; 2019: 29.7; 2020: 34.6; 2021: 32.6; 2022: 32.7; 2023: 32.2; 2024: 31.7; 2025: 31.3.\n  - Fiscal balance (% GDP): 2017: -3.5; 2018: -3.7; 2019: -4.1; 2020: -7.7; 2021: -6.3; 2022: -6.2; 2023: -5.6; 2024: -4.8; 2025: -4.0.\n  - Primary balance: 2017: -2.0; 2018: -1.7; 2019: -1.8; 2020: -5.5; 2021: -3.9; 2022: -2.8; 2023: -2.1; 2024: -1.2.\n  - Public debt (% GDP): 2017: 65.1; 2018: 65.2; 2019: 76.5; 2020: 76.9; 2021: 77.3; 2022: 77.7; 2023: 76.6.\n- Directors’ guidance on fiscal policy:\n  - Fiscal policy appropriately supported households and firms in the wake of the pandemic and should continue to sustain the recovery in the short term.\n  - Fiscal consolidation should resume as soon as the economy recovers.\n  - Authorities encouraged to publish a medium-term fiscal framework to show a credible commitment to put public debt on a firmly downward trajectory.\n  - Further reforms urged to improve tax policy and increase the efficiency of public spending.\n  - Strengthen management and reporting of fiscal risks related to credit guarantees and public-private partnerships."
    },
    {
      "heading": "External sector and reserves",
      "content": "- Current account:\n  - Current account excluding official transfers (% GDP): 2017: -4.5; 2018: -4.3; 2019: -6.7; 2020: -5.8; 2021: -5.1; 2022: -4.6; 2023: -3.8.\n  - Current account including official transfers (% GDP): 2017: -3.4; 2018: -5.3; 2019: -6.0; 2020: -5.4; 2021: -4.4.\n- Trade and external receipts:\n  - Exports of goods (U.S. dollars, % change): 2017: 12.8; 2018: 14.5; 2019: -18.4; 2020: 15.1; 2021: 7.7; 2022: 6.6; 2023: 6.8.\n  - Imports of goods (U.S. dollars, % change): 2017: 7.8; 2018: 13.5; 2019: -0.5; 2020: -18.0; 2021: 14.4; 2022: 7.4; 2023: 6.0; 2024: 6.2; 2025: 6.3.\n  - Merchandise trade balance (% GDP): 2017: -16.5; 2018: -17.2; 2019: -16.7; 2020: -14.6; 2021: -15.1; 2022: -14.8.\n- Reserves and external debt:\n  - Gross reserves (months imports, as of 2009 reserves include the new SDR allocation): 2017: 5.7; 2018: 5.3; 2019: 7.3; 2020: 6.9; 2021: 6.7; 2022: 6.5.\n  - External Debt (% GDP): 2017: 35.0; 2018: 32.0; 2019: 32.8; 2020: 39.7; 2021: 39.3; 2022: 39.9; 2023: 39.0; 2024: 39.1.\n- Remittances and imports: resilience of remittances and lower imports have contained external financing needs despite lower tourism receipts."
    },
    {
      "heading": "Monetary policy and financial sector",
      "content": "- Central bank response:\n  - Bank Al-Maghreb improved liquidity conditions and cut interest rates; measures smoothed pandemic impact on financial markets and the real economy.\n  - Monetary policy should remain accommodative until inflationary pressures reemerge.\n  - Progress in increasing exchange rate flexibility welcomed; completion of transition to planned inflation targeting framework recommended to strengthen monetary policy transmission.\n- Banking sector:\n  - Banks have so far weathered the recession relatively well and credit continued to increase in 2020, reflecting central bank measures and government guaranteed credit schemes.\n  - Directors recommended continued close monitoring of bank asset quality, including regular stress testing.\n  - Calls to accelerate efforts to strengthen the AML/CFT framework and finalize the bank resolution framework."
    },
    {
      "heading": "Structural policies, governance, and social protection",
      "content": "- State-owned enterprises:\n  - Directors supported authorities’ plan to overhaul large state-owned enterprises to improve efficiency and governance, and to support private sector development.\n- Governance and public sector:\n  - Continued efforts welcomed to improve governance, modernize public sector administration, and fight corruption.\n- Social protection and human capital:\n  - Authorities committed to extend social protection to expand coverage, make access to benefits more equitable, and improve targeting and efficiency of spending.\n  - Given limited fiscal space, need to ensure adequate long-term financing for social protection reforms.\n  - Education reforms underscored as critical to build human capital and improve long-term productivity."
    },
    {
      "heading": "Selected economic indicators and memoranda (exact figures from source)",
      "content": "- Population: 35.587 million; 2019\n- Per capita GDP: $3,460; 2019\n- Quota: SDR 894.4 million\n- Poverty rate: 4.8 percent, 2014\n- Main exports: automobiles, phosphate and derivatives; 2018\n- Key export markets: France and Spain (37% of total trade), 2018\n- Nominal GDP (in billions of U.S. dollars): 2017: 109.7; 2018: 118.1; 2019: 119.7; 2020: 113.0; 2021: 124.2; 2022: 131.1; 2023: 138.2; 2024: 145.7; 2025: 153.8\n- Net imports of energy products (in billions of U.S. dollars): 2017: -8.8; 2018: -7.9; 2019: -5.0; 2020: -5.2; 2021: -5.9\n- Local currency per U.S. dollar (period average): 2017: 9.4; 2018: 9.6; 2019: 9.5; 2020: 9.0\n\nIMF press release “IMF Executive Board Concludes 2020 Article IV Consultation with Morocco,” December 23, 2020.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Morocco and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2020/12/23/pr20388-morocco-imf-executive-board-concludes-2020-article-iv-consultation"
    }
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    "Published: December 23, 2020",
    "Executive Board concluded the Article IV consultation with Morocco on December 18 (announcement dated December 23, 2020).",
    "Morocco was hit by the global pandemic and a severe drought in 2020; authorities mounted a prompt policy response, including voluntary private and public contributions to the Covid-19 Fund.",
    "Precautionary and Liquidity Line (PLL) purchase in April 2020 eased external financing pressures; authorities intend to repurchase part of the amount purchased under the PLL arrangement soon.",
    "Real GDP growth:",
    "Labor market:",
    "Inflation:",
    "Deterioration of the fiscal position in 2020 mainly driven by the fall in tax revenues and greater public sector spending financed by the Covid-19 Fund contributions.",
    "Fiscal aggregates (central government, include grants):",
    "Directors’ guidance on fiscal policy:",
    "Current account:",
    "Trade and external receipts:",
    "Reserves and external debt:",
    "Remittances and imports: resilience of remittances and lower imports have contained external financing needs despite lower tourism receipts.",
    "Central bank response:",
    "Banking sector:",
    "State-owned enterprises:",
    "Governance and public sector:",
    "Social protection and human capital:",
    "Population: 35.587 million; 2019",
    "Per capita GDP: $3,460; 2019",
    "Quota: SDR 894.4 million",
    "Poverty rate: 4.8 percent, 2014",
    "Main exports: automobiles, phosphate and derivatives; 2018",
    "Key export markets: France and Spain (37% of total trade), 2018",
    "Nominal GDP (in billions of U.S. dollars): 2017: 109.7; 2018: 118.1; 2019: 119.7; 2020: 113.0; 2021: 124.2; 2022: 131.1; 2023: 138.2; 2024: 145.7; 2025: 153.8",
    "Net imports of energy products (in billions of U.S. dollars): 2017: -8.8; 2018: -7.9; 2019: -5.0; 2020: -5.2; 2021: -5.9",
    "Local currency per U.S. dollar (period average): 2017: 9.4; 2018: 9.6; 2019: 9.5; 2020: 9.0",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Morocco and the IMF](http://www.imf.org/external/country/MAR/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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