An International Monetary Fund (IMF) staff team, led by Roberto Cardarelli, conducted discussions with Moroccan authorities in Rabat for the 2025 Article IV Consultation from January 27 to February 7. At the end of this visit, Mr. Cardarelli issued a statement on Morocco's economic outlook and policy recommendations.
"Economic activity is expected to have grown by 3.2 percent in 2024 and to accelerate to 3.9 percent in 2025," said Cardarelli. He noted that agricultural output is rebounding after recent droughts, while the nonagricultural sector continues expanding amid strong domestic demand. This growth is projected to increase the current account deficit towards its estimated medium-term norm of around 3 percent, with inflation stabilizing at approximately 2 percent.
The IMF staff believes that Morocco's current neutral monetary policy stance is appropriate given the inflation expectations anchored around 2 percent and minimal signs of demand pressures. "Staff agrees with Bank Al-Maghrib that future changes of policy rates should remain data dependent," Cardarelli stated.
Recent tax reforms have expanded the tax base while lowering the tax burden, resulting in greater-than-expected tax revenues in 2024. The central government's deficit for the year was reported at 4.1 percent of GDP compared to the initially announced 4.3 percent in the 2024 Budget.
Cardarelli emphasized that higher-than-expected revenues should be used to accelerate debt reduction efforts closer to pre-pandemic levels and finance structural reforms through further expansion of the tax base and rationalization of spending.
The IMF welcomed ongoing reforms to Morocco's Organic Budget Law aimed at introducing a new fiscal rule based on a medium-term debt anchor and encouraged further progress by adding information on new policy measures' impacts and risks associated with public-private partnership projects.
In terms of job creation, Cardarelli stressed the need for innovative approaches focusing on labor displaced from agriculture due to droughts, particularly by supporting small and medium-sized enterprises (SMEs). "Measures that may encourage development include strengthening support for SMEs under the new Charter of Investment," he said.
The IMF team engaged with senior officials from Morocco's government, Bank Al-Maghrib, and representatives from both public and private sectors during their visit. They expressed gratitude for the hospitality and productive discussions provided by Moroccan authorities and stakeholders.