IMF Concludes 2025 Article IV Review and Resilience Check in Morocco

The IMF Executive Board has finalized Morocco’s 2025 Article IV Consultation, approving a disbursement of SDR 375 million under the RSF arrangement. The Moroccan economy is projected to grow at 3.2 percent in 2024, with expected acceleration to 3.7 percent in the following years. Fiscal strategies and structural reforms aim to address unemployment and enhance climate resilience.

The International Monetary Fund (IMF) Executive Board has concluded the 2025 Article IV Consultation for Morocco, approving the Third Review under the Resilience and Sustainability Facility (RSF). This approval facilitates the immediate disbursement of SDR 375 million, equivalent to approximately US$ 496 million, making the total accessed under the RSF arrangement SDR 937.5 million or about US$ 1.24 billion. The Moroccan economy demonstrated resilience amidst ongoing drought conditions, with real GDP growth anticipated to decrease modestly to 3.2% in 2024 due to robust domestic demand.

Looking forward, GDP growth is projected to revitalize to around 3.7% in the coming years, buoyed by heightened investment and continuous structural reforms. The Moroccan government aims to fortify fiscal buffers by saving a proportion of the revenue from tax reforms while implementing a strategy to sustainably enhance job creation and market competition to mitigate rising unemployment levels.

In 2024, despite drought challenges, the economy showcased resilience supported by solid domestic demand offsetting diminished agricultural output. Consequently, the unemployment rate persisted at approximately 13%, largely due to job losses in the agricultural sector. Coinciding with this, inflation decreased as supply shocks receded, prompting Bank Al-Maghrib to lower the policy rate on two occasions.

The central government achieved a fiscal deficit of 4.1% of GDP in 2024, outperforming expectations due to better than anticipated tax revenues. Advances continued in the structural reform agenda, including the reorganization of state-owned enterprises and enhancing the Mohammed VI Investment Fund.

Furthermore, Morocco has made strides towards climate resilience as mandated by the RSF arrangement. Initiatives include safeguarding underground water resources, refining the regulatory framework for renewable energy production, and strengthening fiscal and financial systems against climate-related risks. In remarks by Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, he commended Morocco’s strong economic frameworks and policies, indicating that the measures implemented would advance improved management of resources and the stability of the fiscal landscape.

In summary, the IMF’s conclusion of the 2025 Article IV Consultation with Morocco highlights the resilience of the Moroccan economy despite ongoing drought conditions. The approval for the disbursement under the RSF arrangement and the implementation of structural reforms are poised to enhance economic stability and job creation. The focus on fiscal buffers and climate resilience demonstrates the Moroccan government’s commitment to sustainable development.

Original Source: www.miragenews.com