Morocco’s Tourism Slump and COVID-19 Impact Fiscal Health, IMF Reports

"The current account deficit increased in 2020 due to the decline in tourism revenues. Tourism activity has been virtually at a standstill since last March due to the pandemic situation," the same statement specified.

For the IMF, the resilience of remittances from Moroccans living abroad and the decline in imports have nevertheless helped contain Morocco’s external financing needs. Similarly, international reserves remained above last year’s levels thanks to the IMF’s precautionary line of credit in April and increased use of external financing.

As for economic activity in Morocco, it experienced a major decline in the first half of 2020 due to the health crisis and drought (which affected agricultural production). This decline led to an increase in the unemployment rate to 12.7% in the third quarter of the year (compared to 9.4% last year) and a decline in inflation.

While the IMF directors welcomed the exceptional measures adopted by the Moroccan central bank to reduce the impact of the pandemic on financial markets and the real economy, they nevertheless recommended closely monitoring the impact of the crisis on the quality of bank assets. They also urged the government to intensify efforts to strengthen the framework for combating money laundering and terrorist financing.