The IMF underlined that non-agricultural GDP growth reached 5½ % in 2007, but overall real GDP growth slowed to 2.2%, due to a sharp contraction in the cereal production.

The mission, which met with senior government officials and the central bank, as well as representatives from the parliament, the private sector, and labour unions, said that Bank Al Maghrib (BAM) has managed well the increase of domestic demand, adding that “the monetary policy stance remains appropriate in the current economic climate.”

Yet the IMF noted that the increase of petroleum and other commodities' prices in the world market has considerably raised the cost of subsidies. It explained that the strong improvement in the budget position in recent years allows, in the short term, to absorb this increase in expenditure without compromising macroeconomic stability.

IMF has also welcomed the intention of the Moroccan authorities, in the medium term, to progressively transform the current system of subsidies, through targeting the neediest.

“The exchange rate regime based on the attachment of the dirham to a basket comprising the euro and the dollar has contributed to macroeconomic stability,” said the IMF, adding that “the level of the exchange rate is in line with economic fundamentals.”

The IMF's mission noted however that “even if the Moroccan banking sector has undergone little disruption in international financial markets, it is important that all agencies remain vigilant to ensure that this sector has adequate capacity to cope with a more volatile global environment”.