Press Release No. 25/68

IMF Executive Board Concludes 2025 Article IV Consultation, Third Review under the Resilience and Sustainability Facility with Morocco

March 18, 2025

• The IMF Executive Board concluded the 2025 Article IV Consultation and approved the Third Review under the Resilience and Sustainability Facility (RSF) arrangement with Morocco, allowing for the immediate disbursement of SDR 375 million (about US$ 496 million).
• The Moroccan economy continued to show resilience despite another year of drought, with real GDP growth projected to slow modestly to 3.2 percent in 2024 amid strong domestic demand. Growth is expected to accelerate over the medium term, driven by stronger investment and the continued structural reforms.
• Saving part of the revenue windfall from tax reforms would help strengthen fiscal buffers and protect against future shocks; while a new strategy to sustainably boost jobs and improve market competition would help address the increased unemployment linked to job displacement in the agricultural sector.

Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded on March 17 the 2025 Article IV consultation^[1] with Morocco and completed the Third Review under the Resilience and Sustainability Facility (RSF) arrangement, which was approved in September 2023 (see PR 23/327). The completion of the Third Review allows the authorities to draw SDR 375 million (about US$ 496 million), bringing total disbursement under the RSF arrangement to SDR 937.5 million (about US$ 1.24 billion). 

In 2024, the Moroccan economy was resilient to yet another year of drought. Robust domestic demand helped offset weak agricultural output and economic activity is expected to have slowed only modestly to 3.2 percent in 2024. The current account deficit widened somewhat, whereas unemployment remained elevated at about 13 percent, mainly reflecting the impact of job losses in the agricultural sector. GDP growth is expected to accelerate to about 3.7 percent over the next few years, supported by a new series of infrastructure projects and the continued implementation of the structural reform agenda.

Inflation decelerated further in 2024, mainly as the impact of supply shocks faded. This prompted Bank Al-Maghrib (BAM) to lower the policy rate twice in June and December. The dirham continued to move within the fluctuation band of ±5 percent.

The central government fiscal deficit improved more than envisaged in the 2024 Budget. The 2024 overall deficit closed at 4.1 percent of GDP, about 0.2 percent of GDP less than projected in the 2024 Budget. This reflects better-than-expected tax revenues that more than offset higher spending. The reform of the Organic Budget Law envisages the introduction of a new fiscal rule based on a medium-term debt anchor.  

The implementation of the announced structural reform agenda has continued. Further steps were taken to restructure SOEs, operationalize the Mohammed VI Investment Fund, and implement the new Charter of Investment.

Morocco continued to make progress in bolstering its resilience to climate change under the RSF arrangement. Measures implemented under the third and final review of the RSF arrangement aim to better protect underground water resources, prepare the ground for a change in tariffication of water, improve the regulatory setting of the electricity market to encourage private sector’s production of renewable energy, and reinforce fiscal and financial systems’ resilience to climate change-related risks.   

Following the Executive Board’s discussion on Morocco, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, issued the following statement:

“The Moroccan economy continued to show resilience to negative shocks, a testament to the country’s very strong economic policies and frameworks. Despite renewed drought conditions, economic activity slowed only modestly to an estimated 3.2 percent in 2024, down from 3.4 percent in 2023, thanks to robust domestic demand. GDP growth is expected to accelerate to about 3.7 percent over the next few years, driven by a new cycle of infrastructure projects and the continued implementation of the structural reform agenda. These reforms are essential to making growth stronger, more resilient, job-rich, and more inclusive.

“The RSF arrangement concluded with the implementation of six of the seven measures scheduled for the third and final review. These measures will help improve the management of scarce water resources, further liberalize the electricity sector, and address the climate risks on the stability of the fiscal position and the financial system. The gradual introduction of the carbon tax was not implemented as the authorities needed to undertake further analysis of its impact and deeper consultations with public and private stakeholders.” 

[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.