The Board of Directors of the International Monetary Fund (IMF) has approved the disbursement of the third tranche for Morocco under the Resilience and Sustainability Facility, amounting to approximately 496 million dollars.
The Moroccan economy has continued to demonstrate resilience despite another year of drought. Growth is expected to accelerate in the medium term, driven by increased investments and ongoing structural reforms, the IMF stated in a press release published Tuesday in Washington.
This new financing brings the total disbursement under this program to approximately 1.24 billion dollars.
Cited in the statement, the Deputy Managing Director and Acting President of the IMF, Kenji Okamura, noted that the Moroccan economy has “continued to show resilience in the face of negative shocks, reflecting the strength of the country’s economic policies and frameworks.”
“Despite another drought, economic activity has only slightly slowed, reaching about 3.2% in 2024, down from 3.4% in 2023, thanks to robust domestic demand. GDP growth is expected to accelerate to around 3.7% in the coming years, driven by a new cycle of infrastructure projects and the continued implementation of the structural reform program. These reforms are essential to strengthen growth, make it more resilient, job-creating, and more inclusive,” he added.
According to the international financial institution, the current account deficit has widened slightly, while unemployment remains high at around 13%, mainly due to job losses in the agricultural sector. GDP growth is also expected to accelerate to around 3.7% in the coming years, supported by a new series of infrastructure projects and the continued implementation of the structural reform program.
“Inflation has further slowed in 2024, mainly due to the easing of supply shock impacts. This has prompted Bank Al-Maghrib (BAM) to lower its key interest rate twice, in June and December. The dirham has continued to fluctuate within the ± 5% margin,” the statement indicates.
The central government’s budget deficit has improved more than expected in the 2024 budget. The overall deficit for 2024 stands at 4.1% of GDP, about 0.2% lower than anticipated in the 2024 budget. This reflects, according to the IMF, higher-than-expected tax revenues that more than offset the increase in expenditures. The reform of the organic finance law provides for the introduction of a new budget rule based on a medium-term debt anchor.
The implementation of the announced structural reform program has continued. New measures have been taken to restructure public enterprises, operationalize the Mohammed VI Fund for Investment, and implement the new Investment Charter.
According to the IMF, “Morocco has continued to make progress in strengthening its resilience to climate change under the Resilience and Sustainability Facility. The measures implemented under the third and final review of the agreement aim to better protect groundwater resources, prepare the ground for a modification of water pricing, improve the regulatory framework of the electricity market to encourage renewable energy production by the private sector, and strengthen the resilience of budgetary and financial systems to climate change-related risks.”