The Arab Monetary Fund (AMF) said that the Precautionary and Liquidity Line Program resulted in a relative rise in the unemployment rate during the period of its application and a significant drop after that.
Morocco signed the program with the International Monetary Fund in 2012, according to AMF.
The most recent deal was reached in 2018, and was extended until 2020. Through this program, Morocco took USD 3 billion to deal with the shock of the COVID-19 pandemic.
The Fund stated in its recent study that the Prevention and Liquidity Line Program resulted in a decrease in the public budget deficit during the implementation period of the program from MAD 6.8 billion to MAD 5.2 billion, and MAD 4.1 billion during and after the program, respectively.
The study further stated that the current account deficit declined after implementing the program from $8 billion to $4.2 billion during the implementation of the Precautionary and Liquidity Line Program.
Additionally, Morocco’s economy growth rate dropped by about 3.6% in 2020 due to several reasons, including the decline in the performance of the agricultural sector, which is considered one of the most important sectors in Morocco, in addition to the decline in the performance of the industrial sector, according to the same source.
The national economy was also affected by the slowdown in the performance of the economic activity of the European Union countries, representing the most prominent trading partner of Morocco, in addition to the circumstances surrounding the COVID-19 pandemic in 2020, added the study.
The total number of debt facilities provided to Morocco by the Arab Monetary Fund reached 30, including 5 compensatory loans, 3 extended loans, 8 loans, 11 automatic loans, a trade facilitation loan, an oil facilitation loan, and an ordinary loan, with a total value of SDR 7.1 billion.
According to the report, Morocco agreed to adopt a number of initiatives as part of the program, namely reforming the tax system and the civil service, decentralizing public finances responsibly, and increasing oversight of state-owned firms.
The country was also required to implement reforms in education and labor market governance, increase women’s participation in the workforce, and enhance the business environment, according to the same source.
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