IMF approves Morocco’s $2.97B precautionary loan

0
234
The International Monetary Fund logo is seen during the IMF/World Bank spring meetings in Washington, U.S., April 21, 2017. REUTERS/Yuri Gripas
The International Monetary Fund logo is seen inside its headquarters at the end of the IMF/World Bank annual meetings in Washington, U.S., October 9, 2016. REUTERS/Yuri Gripas

The International Monetary Fund (IMF) has approved a $2.97 billion precautionary and liquidity line (PLL) facility to help Morocco ward off external economic shocks.

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, the IMF said on its website.

“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,” the IMF Executive Board announced.

Morocco’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, according to Finance Ministry data.

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.

In 2016, the IMF granted Morocco a two-year $3.5 billion credit line to give foreign lenders, investors and rating agencies reassurance about Morocco’s economic policies, allowing it to tap international capital markets on more favourable terms.

The external shocks that the PLL is intended to guard against could include a spike in oil prices, the central bank has said.