Adjustment of the Moroccan balance of payments to external shocks: The case of the Covid-19 coronavirus pandemic

Abstract

One of the most challenging issues in economic policy for a long time has been the impact of external shocks on macroeconomic imbalances and the most appropriate adjustment measures to address them.

Since the balance of payments is a document that reflects the external account position of a country in relation to the rest of the world, it is through this conventional document of a statistical and accounting nature that external shocks could manifest themselves. It informs government authorities about the state of the country's international economic relations, assesses its economic situation and helps in learning about monetary, fiscal, trade and exchange rate policy decisions.

Declared a global pandemic on 11 March 2020 by the World Health Organization (WHO), the crisis has had a significant impact not only on health but also on the economy. In Morocco, as in all countries of the world, this economic-pandemic shock has had consequences on both internal and external financial balances, including the balance of payments.

In order to contain the effects of the crisis on the economy, an arsenal of measures was adopted, in which the Moroccan authorities resorted to a battery of measures to curb the unprecedented crisis. In order to limit the consequences, the authorities have had to react on a set of fiscal, monetary and exchange rate policy instruments to remedy the situation.

This article attempts to assess the impact of these measures (prevention, detection and recovery) on the adjustment of the Moroccan balance of payments, knowing that excessive and simultaneous recourse to these different instruments would have effects incompatible with the expected objectives in the medium and long term.

JEL Classification: E42, E60, F40

Paper type: Theoretical Research