IMF hails resilience of Morocco’s economy to recent shocks

The International Monetary Fund has praised the resilience shown by Moroccan economy to challenging external conditions. Despite water scarcity, the September 2023 earthquake, and country’s economic activity picked up to 3 % in 2023 thanks to strong exports and a rebound of domestic demand

In a press release issued Wednesday, the Fund’s Executive Board, which concluded the Article IV consultation, said Morocco’s economic growth is expected to gradually pick up to 3,5 % over the next few years, boosted by the continued implementation of the structural reform agenda.
Inflation fell over the course of 2023, mainly as the impact of supply shocks faded. This led Morocco’s central bank to halt the interest rate tightening cycle since June last year, after three consecutive increases from September 2022.

The Kingdom’s current account deficit narrowed significantly. This reflects both a reduced trade deficit in goods (driven by the lower import prices of energy, raw and intermediate goods, and food items, as well as the robust performance of automotive and electronics exports), buoyant export of services (both tourism and non-tourism related), and the continued expansion of inward remittances.

The IMF commended Morocco’s very strong macroeconomic policies and institutional frameworks, which supported the pick-up in growth and decline in inflation.

The Fund welcomed the country’s progress made in strengthening its financial supervisory and regulatory framework, hailing Moroccan government strong commitment to implement structural reforms.

The reform of the social protection, health, and education systems would improve fairness and quality of access and sustain human capital in the long run, said the International Monetary Fund.

Furthermore, the operationalization of the Mohammed VI Fund and the new Charter of Investment would stimulate private investment and create sustainable jobs, underlined the Fund’s experts, stressing the importance of the efforts engaged to reduce dependence on fossil fuels, address water scarcity, and strengthen good governance.

They also welcomed the ongoing work related to the national water program and the plans to achieve zero net emissions by 2050.