IMF Concludes 2026 Article IV Consultation with Morocco, Affirms Strong Growth Outlook
The International Monetary Fund (IMF) Executive Board has concluded its 2026 Article IV consultation with Morocco and completed the mid-term review under the country’s Flexible Credit Line (FCL) arrangement, reaffirming confidence in the country’s macroeconomic policy framework and growth outlook.
The FCL arrangement, approved on April 2, 2025, continues to be treated by Moroccan authorities as precautionary, with a gradual exit planned depending on the evolution of external risks.
According to the IMF, Morocco’s economy recorded strong growth in 2025, with real GDP expanding by an estimated 4.9 percent, driven by a rebound in agricultural output and increased activity in large-scale infrastructure projects. The Fund, however, noted that unemployment remains elevated despite the growth momentum.
Inflation remained subdued at an average of 0.8 percent, allowing the central bank, Bank Al-Maghrib, to maintain a neutral monetary policy stance following earlier rate cuts.
On the external front, the current account deficit widened to 2.1 percent of GDP, largely reflecting increased imports linked to investment activity, although this was partly offset by strong tourism inflows.
Fiscal performance exceeded expectations, with strong revenue mobilisation helping to contain the overall fiscal deficit to 3.5 percent of GDP, despite higher spending on infrastructure projects and transfers to state-owned enterprises.
Looking ahead, the IMF projects continued strong growth, with real GDP expected to expand by 4.4 percent in 2026 and 4.5 percent in 2027, before stabilising at around 4 percent over the medium term. The outlook is underpinned by sustained infrastructure investment and increasing private sector participation.
Nonetheless, the Fund cautioned that near-term growth could be weighed down by the ongoing conflict in the Middle East, particularly through higher energy prices and weaker external demand.
Inflation is expected to rise temporarily in 2026 due to higher energy costs, before moderating to around 2 percent over the medium term. The current account deficit is also projected to widen moderately, reflecting the import-intensive nature of infrastructure investments.
Despite these pressures, international reserves are expected to remain at adequate levels, while fiscal consolidation efforts are projected to gradually reduce public debt to 60.5 percent of GDP by 2031.
The IMF highlighted growing downside risks to the outlook, including heightened global uncertainty, commodity price volatility, and potential trade disruptions affecting key trading partners in the Euro Area. Domestically, risks stem from the possibility of lower-than-expected returns from public infrastructure investments.
Commenting on the outcome of the Board discussions, IMF Deputy Managing Director and Chair, Kenji Okamura, stated that “the Moroccan economy continued to demonstrate strong resilience,” supported by agriculture, construction, and tourism.
He emphasised the need for “prudent macroeconomic policies, careful management of fiscal and economic risks, increased investment in human capital, and steadfast implementation of structural reforms” to sustain inclusive growth and job creation.
The IMF further noted that Morocco continues to meet the qualification criteria for the FCL arrangement, citing the country’s strong economic fundamentals, institutional frameworks, and sustained track record of sound macroeconomic management.
