WASHINGTON, Dec 18 (KUNA) -- The International Monetary Fund (IMF) Executive Board has approved a Precautionary Liquidity Line (PLL) arrangement for Morocco to provide insurance against external risks and support policies to reduce fiscal and external vulnerabilities while promoting more growth.
"Further fiscal consolidation will help lower the public debt to GDP ratio over the medium term while securing priority investment and social spending," it said in a statement.
"Reforms of education, governance, the labor market and continued improvement in the business environment will be essential to raise potential growth and reduce high unemployment levels, especially among the youth and women," it added.
The funds, totalling USD 2.98 billion, were approved under a two year-arrangement. The access under the first year will be equivalent to USD 1.73 billion.
The PLL was introduced in 2011 "to meet more flexibly the liquidity needs of member countries with sound economic fundamentals and strong records of policy implementation but with some remaining vulnerabilities," it said.
IMF Deputy Managing Director and Acting Chair of the Board Mitsuhiro Furusaw, said in the statement, "Morocco has made significant strides in reducing domestic vulnerabilities in recent years. Growth remained robust in 2018 and is expected to accelerate gradually over the medium term, subject to improved external conditions and steadfast reform implementation."
The outlook remains subject to downside risks including geopolitical risks, slow growth in Morocco's main trading partners, and global financial market volatility. Therefore, the IMF assessed that a PLL will provide "insurance against external risks." (end)