Despite the sustained unfavourable external environment and challenging domestic conditions, Morocco's macroeconomic performance improved in 2013 with GDP growth quickening to 4.5% from 2.7% a year earlier on the back of an exceptional agricultural season, the IMF said in its 2013 Article IV report. Growth was supported by strong policy commitment and implementation, as well as the insurance provided by the USD 6.2bn 24-month Precautionary and Liquidity Line (PLL) arrangement agreed in 2012, the IMF underscored. Although Morocco's non-agriculture growth has been dragged down by the EU crisis, it is expected to rebound in 2014 helping the country record an overall GDP growth of 4.0%, the IMF forecasts. The 2013 current account deficit was reduced and FX reserves have been stable above four months of imports for more than a year, the IMF noted. Such favourable parameters were partly achieved by sustained foreign investment and access to international bond markets at favourable terms. Lower international oil prices and policy actions helped reduce the fiscal deficit from 7.3% of GDP in 2012 to 5.4% in 2013, the IMF estimates. The fund commended the important measures taken by the authorities that helped reduce fiscal and external vulnerabilities and strengthen the economy's resilience. Still, given the significant downside risks and persistently high unemployment in Morocco , the economic outlook will rely on the sustained delivery of policy and structural reforms. The latter are drafted to continue rebuilding policy buffers and promote higher and more inclusive growth, according to the IMF. The IMF welcomed the reduction of energy subsidies in 2013 while increasing social protection to the most vulnerable, calling on the authorities to sustain such efforts. The IMF also advised that revenue and spending should be reoriented to better support growth and inclusiveness in 2014 and beyond. This can be achieved through reforms aimed at broadening the tax base, reviewing tax incentives and exemptions, reforming the VAT system, moderating the public wage bill, and reforming the pension system. The IMF, likewise, recommended further reforms to strengthen the business climate, transparency, and the judiciary system. It also asked the government to improve the functioning of the labour market in order to attract private investment and promote strong job growth. Morocco's macroindicators 2013 2014F Real GDP 4,5% 3,9% CPI inflation 0,4% 2,5% Budget balance/% of GDP -5,4% -5,9% Total govt debt/% of GDP 61,7% 62,5% CA deficit (including official transfers) -7,4% -6,5% Source: IMF
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