IMF deal spells confidence in Morocco's economy

Significance

This new facility is designed to provide insurance against external shocks, such as further increases in international commodity prices. Small-scale demonstrations took place on April 8 against rising living costs. The FCL is not subject to conditions that the government must fulfil, reflecting the IMF’s positive assessment of Rabat’s management of the economy.

Impacts

• The rising cost of living will test the effectiveness of social protection system reforms.
• Higher interest rates will make it harder for the government to meet its targets for reducing the fiscal deficit.
• Protests are unlikely to expand for the time being, despite inflationary pressures.