IMF urges Morocco to push ahead with fiscal reforms

International Monetary Fund Chief Christine Lagarde said late Friday that the fund's project growth of Morocco will fall below 4 percent in 2014, as agriculture production returns closer to normal levels and non-agricultural activity picks up. In a statement made at the end of her two days visit to Rabat, Lagarde said that Moroccan economic performance improved in 2013 amid headwinds and the euro area crisis. She said the authorities' strong policy actions coupled with lower international oil prices, helped reduce the fiscal deficit by almost 2 percent of GDP to 5.4 percent. The current account also improved while reserves remained broadly stable. However, unemployment has remained high especially among the youth. "I commended the authorities for the important steps taken recently to reduce economic unbalances, including the courageous subsidy reform and the extension of social programs to support the poorest," Lagarde added. "Morocco has significant potential, but faces a number of challenges," she said, adding "I encouraged my counterparts to take further measures to push ahead with fiscal reforms and to implement a structural reform agenda in support of competitiveness and higher job creation. Speaking earlier at a press conference, lagarde said that IMF is ready to renegotiate a 6.2 billion U.S. dollars precautionary line of credit for Morocco, if its government believed it was needed. The current line of credit, approved by the IMF in August 2012, will expire in August.