Morocco’s economy is on pace to grow, with GDP projected to reach 3.9% in 2025, up from an estimated 3.2% in 2024, according to an International Monetary Fund (IMF) report on Monday.
The positive momentum comes as agricultural output has been recovering from ongoing drought and nonagricultural sectors maintain robust growth, driven by strong domestic demand.
The IMF report credits tax reforms for improving fiscal health, with the 2024 deficit coming in at 4.1% of GDP, slightly below the 4.3% anticipated in the budget.
Stronger-than-expected tax revenues played a key role, although only a small portion of the windfall was saved. The IMF is recommending using higher revenues to accelerate debt reduction while ensuring sufficient funding for structural reforms.
The central bank, Bank Al-Maghrib, is maintaining a neutral monetary policy, with inflation stabilizing around 2%. The IMF commended the bank’s data-driven approach to future policy decisions and its continued preparation for an inflation-targeting framework.
The report maintains that structural reforms remain crucial for long-term growth. The IMF highlighted the need to boost job creation, particularly for workers displaced from the agricultural sector.
Supporting small and medium-sized enterprises (SMEs) is a priority for the kingdom, with the Mohammed VI Investment Fund playing a key role in expanding SME access to financing. The report also highlights the importance of regulatory reforms to remove barriers discouraging firms from scaling or transitioning out of the informal sector.
The government’s fiscal strategy includes an ongoing reform of the Organic Budget Law, to ensure fiscal stability. Authorities are also working to incorporate climate risk assessments into fiscal planning.
The IMF urges further transparency in evaluating new policies and quantifying the risks associated with public-private partnerships.