Moroccan economy to grow 3.7 percent in 2015

Morocco's state planning agency said on Thursday it expected economic growth to pick up to 3.7 percent in 2015, from 2.5 percent in 2014. The semi-autonomous agency, which released its annual figures before the government starts preparing next year's national budget, forecast a 2014 deficit of 5.2 percent of gross domestic product (GDP) in 2014, above the 4.9 percent predicted by the Islamist-led government.
The agency said the current account deficit would reach 7.4 percent of GDP in 2015, and public debt would rise to 67.6 percent of GDP. The agency said its 2015 forecasts assume a average agricultural harvest and that the government will stick to its investments policy and cut subsidies.
It sees inflation rising to 1.7 percent in 2015 from 1.1 percent in 2014, and public debt reaching 67.6 percent of GDP against 66.4 percent in 2014 and 63.5 percent in 2013. Morocco has gone further than most in the region in making painful changes required by international lenders, such as ending subsidies on gasoline and fuel oil prices and starting to cut diesel subsidies significantly. It has also promised tough decisions on pensions.
Morocco is finalising a new two-year precautionary line of credit (PLL) with the International monetary fund (IMF), which would be less than the $6.2 billion granted by the fund in 2012-2014, Morocco's central bank Governor Abdellatif Jouahri said last week. Moroccan media has reported the new IMF credit line will be for $4 billion, but the IMF said talks are still underway.
"The Moroccan authorities have expressed interest in another PLL and staff is in discussion with them to follow up on this matter," an IMF spokeswoman told Reuters by email. The IMF deal has allowed Morocco to tap international capital markets on favourable terms. The state planning agency put 2015 financing needs at around 7.4 percent of GDP and estimated that about 57 percent could be covered in the international markets.
Morocco raised 1 billion euros ($1.36 billion) through a 10-year Eurobond earlier this month at a yield of 3.7 percent, tapping into growing demand for euro-denominated emerging market debt. Moroccan finance minister Mohamed Boussaid told Reuters there were no plans for further international bonds in 2014.