Press Release No. 08/186

Press Release: Statement by IMF Managing Director Dominique Strauss-Kahn at the Conclusion of his Visit to Morocco

July 31, 2008

Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), issued the following statement in Rabat on July 30, 2008, at the end of the first day of his visit to Morocco:

"I am very pleased to have the opportunity to undertake my first visit to Morocco as Managing Director of the IMF. I congratulate the government of His Majesty King Mohammed VI on Morocco's strong economic gains in recent years, which have made it a pillar of development in the region. I also indicated that our Executive Board, representing 185 countries, last week praised Morocco's performance in its annual review of the Moroccan economy in the context of the 2008 Article IV consultation.

"During our discussions, we agreed on the need to sustain the momentum of reform, including by increasing Morocco's openness to the global economy, in order to raise living standards and create jobs. Similar to many other emerging market countries, Morocco currently faces the challenge of surging food and fuel prices, which has significantly impacted the trade balance and the budget. Over the medium term, reducing the subsidy burden, particularly through a better targeting toward the poor, will be essential. This will also create room to boost spending on investment and social spending, and help further reduce public debt.

"I also congratulated Bank Al-Maghrib for its effective management of monetary policy. Going forward, international developments will make it harder to control inflation, and I am reassured that the central bank stands ready to adjust monetary policy if inflationary pressures intensify.

"The financial sector is sound and robust to shocks, and I welcome ongoing efforts to strengthen sector supervision in view of the rapid credit growth, notably in real estate. Morocco's increasing integration in the global economy is also welcome. I indicated that the Fund will continue to support Morocco's ongoing reform efforts through policy advice and technical assistance."