To help Morocco address external economic shocks, the International Monetary Fund (IMF) has approved financing of about $2.97 billion in the form of a Precautionary and Liquidity Line (PLL).
According to Reuters, the IMF Executive Board said “the new PLL arrangement will provide insurance against external shocks and support the authorities’ efforts to further strengthen the economy’s resilience and promote higher and more inclusive growth”.
A statement released by the IMF on its website noted that the two-year arrangement will help lower the ratio of public debt to GDP over the medium term while securing priority investment and social spending.
Morocco’s Finance Ministry data reveals that the country’s treasury debt-to-GDP ratio for 2019 is expected to rise to 67.1 percent in 2019, up from 66.7 percent in 2018 and 65.1 percent in 2017. The ratio of public debt to GDP stood at 91.2 percent in 2017, with the government planning to reduce it to 60 percent in 2021.
To give foreign lenders, investors and rating agencies reassurance about Morocco’s economic policies, the IMF granted Morocco a two-year $3.5 billion credit line. The fund was also designed to allow the country have access to international capital markets on more favourable terms.
Morocco’s central bank, Bank Al-Maghrib said the PLL is intended to guard against external shocks, which could include a surge in oil prices.