The International Monetary Fund (IMF) has approved a new credit facility for Morocco to help in crisis prevention and to support reform.
The new two-year $4.5 billion flexible credit line (FCL) will assist the country in rebuilding buffers and accelerating structural reforms in an uncertain external environment, the IMF said in a statement.
The facility will provide Morocco insurance against downside risks, as the economy remains vulnerable to worsening global economic and financial conditions, higher commodity prices, and possible new drought.
Morocco has reported significant rainfall this year which augurs well for the agricultural sector that accounts for about one-sixth of the economy. The economy declined last year by 7 percent because of drought.
“The authorities are committed to treating the new FCL as ‘precautionary’ and gradually reducing access,” the IMF said.
Morocco’s economy has been resilient amid multiple shocks, the Fund said. The country has navigated the Corona pandemic, economic fallout from Russia’s invasion of Ukraine, a major earthquake in 2023 and five droughts in six years.
However, IMF projects medium-term growth at 3.6 percent, supported by planned infrastructure projects and progress in structural reforms.
In January data from the High Commission for Planning showed Morocco’s economy expanded by 4.3 percent in the third quarter of 2024, compared to 3 percent a year earlier.
The growth was primarily driven by increased domestic demand and easing inflation.
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