REUTERS
(Reuters) – The International Monetary Fund on Friday approved loans to Morocco and Jordan, which have been hit by costlier energy bills, strains from regional uncertainty and an escalating eurozone crisis.
IMF Managing Director Christine Lagarde said Morocco’s economic policies have contributed to strong growth, low inflation and a resilient banking sector. The country has been hard-hit by a decline in trade from the euro zone.
“High oil prices have contributed to a build-up of fiscal and external pressures,” IMF Managing Director Christine Lagarde said in a statement. “The authorities have already taken action to address these vulnerabilities, and are committed to maintaining sound policies,” she added.
The IMF board also approved a $2 billion loan to Jordan, whose finances have been hit by regional protests and has been forced to switch from gas to more expensive oil for electricity because of supply disruptions from Egypt.
“Jordan is facing external and fiscal challenges stemming largely from exogenous shocks to its energy sector,” Lagarde said. “These shocks have put pressure on the external accounts, pushed up the deficits of the central government and the public electricity company, and exposed structural weaknesses in fiscal and energy policies.”
Jordan’s economic growth slowed to 3 percent year-on-year in the first quarter this year due to sluggish private sector growth. Turmoil of the Arab Spring in neighboring countries such as Syria and Egypt have also cast a shadow over investment, while ramped up social spending to quell unrest has further strained public finances.
(Reporting by Lesley Wroughton)
