2023-09-28 19:47:20
Archyde.com quoted informed sources as saying that the Executive Board of the International Monetary Fund approved on Thursday a loan worth $1.3 billion to Morocco from the new Resilience and Sustainability Fund, to strengthen the Kingdom’s ability to withstand climate-related disasters.
Morocco had requested money from the new fund – which was established by the International Monetary Fund in 2022 – long before the earthquake that struck the High Atlas Mountains on September 8, killing more than 2,900 people.
The Council’s approval comes a few weeks before Morocco hosts the annual meetings of the International Monetary Fund and World Bank in Marrakesh.
More than a week ago, the Maghreb Arab Press (the official agency) quoted the Director of the International Monetary Fund, Kristalina Georgieva, as saying that the Fund “signed an agreement with Morocco at the expert level for long-term financing worth $1.3 billion,” directed to strengthening the capacity of… The Kingdom seeks to mitigate the repercussions of climate change.
According to the Moroccan agency, this long-term loan extends over 20 years with a grace period of 10.5 years, while Georgieva said that Morocco will have a greater ability to confront disasters in the future.
Compensation for the financial impact of the earthquake
In the same context, the credit rating agency Fitch said on Thursday that external support may help Morocco contain the impact of the earthquake that struck the country and ease pressures on public finances.
The agency stated in a report that recovery efforts following the earthquake will lead to an increase in public spending and an expansion of the fiscal deficit in the near term.
But it is likely that international aid will offset some of the reconstruction costs, explaining that financial transfers will provide more support for external liquidity.
“The costs of the recovery are likely to increase spending further, leading to larger deficits and higher debt than we expected at the time of the last review last April,” Fitch said.
Fitch expected that the government would be able to obtain additional external financing, which would help offset reconstruction costs and higher borrowing requirements.
Morocco recently announced a plan to reconstruct the areas affected by the earthquake at approximately $11.7 billion (8.5% of GDP) over a period of 5 years.
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