Country cuts 2016 growth forecast, to renegotiate IMF credit line

May 24, 2016 6:39 AM

The North African kingdom expects a cereal crop of 3.35 million tonnes, down from last season's record 11 million tonnes. The harvest includes 1.86 million tonnes of soft wheat, 870,000 of durum and 620,000 of barley.

A farmer picks strawberries, to be exported, in a field in the town of Moulay Bousselham in Kenitra province March 15, 2014.

Morocco has cut its economic growth forecast for this year to less than 2 percent from 3 percent, after the cereal harvest suffered its worst drought in three decades, the finance minister said on Monday.

It was Mohamed Boussaid's first public comment since the release of the annual harvest figures by the Agriculture Ministry showed a 70 percent drop.

Agriculture accounts for 15 percent of the economy, which grew 4.4 percent in 2015.

"Except grains, all other agricultural cultivations are doing well," Mohamed Boussaid told reporters, adding that non-agricultural sectors were also buoyant.

Boussaid told Reuters on the sidelines of a news event the government planned to renegotiate a precautionary credit line with the International Monetary Fund.

The amount and other details will be discussed later, he said. The current credit line is worth $5 billion and will expire in August 2016.

The IMF liquidity line is intended to provide reassurance to foreign lenders, investors and rating agencies, allowing Morocco to tap international capital markets on favourable terms.

The drop in global oil prices has revived public finances and reduced deficits in the region's biggest energy importer, giving the country more room to manoeuvre.