Place Credit Reports Morocco Order
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Economy Overview:
Moroccan economic policies brought macroeconomic stability to the
country in the early 1990s but have not spurred growth sufficient to
reduce unemployment that nears 20% in urban areas. Poverty has actually
increased due to the volatile nature of GDP, Morocco's continued
dependence on foreign energy, and its inability to promote the growth of
small and medium size enterprises. Despite structural adjustment
programs supported by the IMF, the World Bank, and the Paris Club, the
dirham is only fully convertible for current account transactions and
Morocco's financial sector is rudimentary. Moroccan authorities
understand that reducing poverty and providing jobs is key to domestic
security and development. In 2004, Moroccan authorities instituted
measures to boost foreign direct investment and trade by signing a free
trade agreement with the US and selling government shares in the state
telecommunications company and in the largest state-owned bank. The Free
Trade agreement went into effect in January 2006. In 2005, GDP growth
slipped to 1.2% and the budget deficit rose sharply - to 7.5% of GDP -
because of substantial increases in wages and oil subsidies. Long-term
challenges include preparing the economy for freer trade with the US and
European Union, improving education and job prospects for Morocco's
youth, and raising living standards, which the government hopes to
achieve by increasing tourist arrivals and boosting competitiveness in
textiles.
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