The International Monetary Fund (IMF) has expressed strong confidence in Morocco’s economic direction after concluding its 2026 Article IV consultation and completing the mid-term review of the country’s Flexible Credit Line (FCL) arrangement. The assessment underscores Morocco’s resilience, sound policies, and favourable growth prospects despite a challenging global environment.
The precautionary FCL arrangement, approved in April 2025, remains in place as a safeguard against external shocks, with Moroccan authorities planning a gradual exit as global risks ease.
According to the IMF, Morocco delivered robust economic performance in 2025, with real GDP growth estimated at 4.9 percent. The expansion was driven largely by a recovery in agricultural production and heightened activity in major infrastructure projects. However, the Fund noted that unemployment remains high, indicating that growth has yet to translate fully into job creation.
Inflation stayed notably low at an average of just 0.8 percent, enabling the central bank, Bank Al‑Maghrib, to maintain a neutral monetary policy stance following earlier interest-rate cuts.
On the external side, the current account deficit widened slightly to 2.1 percent of GDP. This increase was attributed mainly to higher imports linked to investment projects, although strong tourism earnings helped cushion the impact. Fiscal performance, meanwhile, exceeded expectations. Improved revenue mobilisation allowed the government to contain the budget deficit to 3.5 percent of GDP despite increased spending on infrastructure and support for state-owned enterprises.
Looking ahead, the IMF projects Morocco’s economy will continue to expand at a solid pace, forecasting growth of 4.4 percent in 2026 and 4.5 percent in 2027, before stabilising around 4 percent over the medium term. This outlook is supported by sustained public investment and growing private-sector participation.
Still, the Fund warned that short-term growth could face headwinds from ongoing tensions in the Middle East, particularly through rising energy prices and weaker global demand. Inflation is expected to increase temporarily in 2026 due to higher energy costs but should settle near 2 percent in the medium term.
Morocco’s external position is projected to remain stable, with international reserves staying at comfortable levels even as the current account deficit widens moderately because of import-heavy infrastructure spending. Fiscal consolidation efforts are also expected to gradually reduce public debt to about 60.5 percent of GDP by 2031.
The IMF highlighted several downside risks, including global uncertainty, commodity price volatility, and potential trade disruptions affecting key partners in the Euro Area. Domestically, concerns centre on whether large public investments will deliver the anticipated economic returns.
Commenting on the findings, IMF Deputy Managing Director Kenji Okamura said Morocco’s economy continues to demonstrate strong resilience, supported by agriculture, construction, and tourism. He emphasised the importance of prudent policymaking, sustained structural reforms, and increased investment in human capital to ensure inclusive growth and job creation.
The Fund concluded that Morocco still meets the strict qualification criteria for the Flexible Credit Line, citing strong economic fundamentals, effective institutions, and a consistent track record of sound macroeconomic management.
