The IMF concluded its 2025 Article IV Consultation for Morocco, approving SDR 375 million disbursement. Morocco’s economy is resilient despite drought, with GDP growth projected at 3.2% in 2024, expected to accelerate in future years. Structural reforms and fiscal management are crucial for addressing unemployment and enhancing stability.
The International Monetary Fund (IMF) Executive Board concluded its 2025 Article IV Consultation for Morocco and approved the Third Review under the Resilience and Sustainability Facility (RSF), enabling an immediate disbursement of SDR 375 million (approximately US$ 496 million). This decision reflects Morocco’s resilience amid economic challenges, particularly a year marked by drought.
Despite facing adverse conditions, Morocco’s economy demonstrated resilience, with real GDP growth expected to slow slightly to 3.2 percent in 2024, supported by strong domestic demand. Forecasts indicate a medium-term growth acceleration driven by increased investments and the continuation of structural reforms aimed at enhancing economic stability and job creation.
The Moroccan government is advised to save part of its revenue windfall from effective tax reforms, thereby strengthening fiscal buffers against future economic shocks. New strategies aimed at sustainably increasing job opportunities and enhancing market competition are essential to address unemployment issues, especially from job displacements in the agricultural sector.
The IMF’s report highlighted that Morocco’s economy managed to withstand another drought, showing only a modest GDP growth slowdown. The current account deficit increased, while unemployment remained around 13 percent due to job losses in agriculture. Future GDP growth projections have improved to about 3.7 percent, facilitated by ongoing infrastructure projects and structural reforms.
Inflation rates have declined, leading to the Bank Al-Maghrib lowering its policy rate twice within 2024 in response to diminishing supply shocks. The Moroccan dirham remains stable within an established fluctuation band. Meanwhile, the government’s fiscal deficit was better than anticipated, closing at 4.1 percent of GDP, largely due to higher-than-expected tax revenues that offset increased spending.
Continued efforts to implement structural reforms included restructuring state-owned enterprises, operationalizing the Mohammed VI Investment Fund, and applying the new Charter of Investment. Additionally, Morocco has made strides in enhancing climate resilience through measures under the RSF arrangement, which supports better management of water resources and encourages the private sector’s involvement in renewable energy.
Mr. Kenji Okamura, Deputy Managing Director and Acting Chair at the IMF, praised Morocco’s economic resilience, citing effective policies that contributed to avoiding severe impacts from drought. “Economic activity slowed only modestly to an estimated 3.2 percent in 2024, thanks to robust domestic demand,” he stated. He emphasized the importance of ongoing reforms for fostering inclusive and resilient growth, underscoring the need to address climate risks affecting fiscal stability and the financial system.
In summary, the IMF’s 2025 Article IV Review and Third RSF Review highlighted Morocco’s economic resilience despite ongoing drought conditions. Essential reforms aim to enhance fiscal stability, promote job creation, and address climate-related risks. Continued government efforts and strategic fiscal management are critical for sustaining growth in the coming years, along with the successful implementation of structural reforms designed to bolster economic stability and resilience.
Original Source: www.miragenews.com
