Morocco predicts economic rebound in 2015

AP News
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Posted: Jan 20, 2015 2:03 PM

CASABLANCA, Morocco (AP) — Morocco will experience strong economic growth in 2015 based on expectation of a bountiful harvest and the drop in oil prices, authorities said Tuesday.

Ahmed Lahlimi Alami, the high planning commissioner, told journalists that growth was expected to be 4.8 percent in 2015, a dramatic increase over 2.6 percent the previous year, which was marked by a poor harvest.

"2015 will be a good year because we are counting on predictions of a good agricultural year," Alami said. "We will also profit from the fall in the price fo oil."

Morocco, a close U.S. ally, often teeters on the edge of social unrest because of a large population of impoverished people. It is also one of the biggest sources of recruitment for the Islamic State group.

Unlike neighboring Algeria whose economy depends almost entirely on oil, Morocco imports nearly all of its energy and has experienced a windfall from the dramatic fall in prices.

Morocco's Islamist-led government has pursued austerity programs since coming to power in 2012, freezing government hiring, cutting sensitive fuel subsidies and spending.

According to Alami, the amount spent on subsidies fell from nearly $6 billion in 2012 to $3.5 billion in 2014.

Faced with the pro-democracy Arab Spring demonstrations in 2011, Morocco's previous government incurred a great deal of debt by dramatically raising salaries and increased government spending in 2011.