Morocco’s economic outlook improving in 2010: IMF

Morocco’s economic outlook is expected to improve in 2010, although the pace of recovery is somewhat dependent upon the strength of economy of the euro zone, its top trading partner, the IMF said on Friday.

In a statement following its regular consultations, the International Monetary Fund said Morocco’s economy would probably grow 3 or 3.5 percent next year.

Longer term, the IMF advised Morocco to strengthen its trade competitiveness because domestic demand may not generate the desired growth rates.

“However, this task will be difficult in a context where potential growth in Europe has been reduced,” it said. “Macroeconomic policies, structural reforms, and social policies must be coordinated to meet these objectives.”

The IMF said Morocco’s exchange rate regime, under which the dirham is pegged to a currency basket composed essentially of the euro, has “served Morocco well, contributing to macroeconomic stability, and particularly to price stability.”

It said increased flexibility in monetary and exchange rate policies could help Morocco better adapt to changes in the international environment.

“In particular, implementing an explicit inflation targeting framework combined with increased flexibility in the exchange rate could be beneficial, particularly in a context where inflationary pressures are low,” the IMF said.

Reuters.