The IMF has approved Morocco’s Third Review under the Resilience and Sustainability Facility, allowing a disbursement of SDR 375 million. The Moroccan economy is projected to grow modestly at 3.2% amid drought, with structural reforms expected to enhance growth to 3.7%. Fiscal management shows improvement, although unemployment remains high at 13%. The country is making strides in climate resilience and economic reforms.
On March 17, 2025, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Morocco and approved the Third Review under the Resilience and Sustainability Facility (RSF). This approval enables the immediate disbursement of SDR 375 million (approximately USD 496 million), resulting in total disbursements of SDR 937.5 million (around USD 1.24 billion) under the RSF arrangement.
The Moroccan economy demonstrated resilience in the face of another challenging drought year, with real GDP growth projected to moderate to 3.2 percent in 2024. This decline is mitigated by strong domestic demand, though the unemployment rate remains at approximately 13 percent due to job losses in agriculture. Future growth is anticipated to accelerate to 3.7 percent, bolstered by upcoming infrastructure projects and ongoing structural reforms.
In 2024, inflation has shown signs of deceleration, primarily as supply shocks receded, leading Bank Al-Maghrib (BAM) to reduce the policy rate twice during the year. The Moroccan dirham maintained stability within a fluctuation band of ±5 percent. The central government fiscal deficit improved to 4.1 percent of GDP, which is better than the initial projection, thanks to better-than-expected tax revenues that compensated for increased spending.
Additionally, Morocco is implementing its structural reform agenda, including the restructuring of state-owned enterprises, operationalization of the Mohammed VI Investment Fund, and the introduction of a new Charter of Investment. Climate resilience measures are also being advanced under the RSF, focusing on sustainable water management, regulatory enhancements for renewable energy, and fiscal resilience against climate risks.
Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, remarked on the continued resilience of the Moroccan economy, attributing it to robust economic policies. He noted the modest slowing of economic activity and highlighted the importance of structural reforms in achieving strong, resilient, inclusive growth over the coming years. While six of the seven planned measures for the RSF have been implemented, the introduction of a carbon tax has been postponed for further analysis and stakeholder consultation.
In conclusion, the IMF’s approval of the Third Review under the RSF signals strong support for Morocco’s economic resilience and ongoing structural reforms. Despite challenges such as drought and high unemployment, the Moroccan economy is projected to grow steadily with a focus on infrastructure and sustainability. Continued efforts in fiscal management and climate resilience will be pivotal in stabilizing the economy and facilitating inclusive growth.
Original Source: www.miragenews.com
