- Real GDP growth is projected at 4.4 percent in 2026, supported by strong agriculture output and public infrastructure investment. Scaling up public investment offers opportunities for stronger growth and job creation provided risks are well managed and human capital is strengthened.
- Continued revenue performance together with reprioritization of spending would create space for priority social spending and accelerate the rebuilding of fiscal buffers.
- Sustainable job creation remains a pressing priority, and calls for a more dynamic private sector, leveling the playing field between public and private entities, and further reforms in the labor market.
Washington, DC: On March 20, the Executive Board of the International Monetary Fund (IMF) concluded the 2026 Article IV consultation[1] with Morocco and completed the Mid-Term Review under the Flexible Credit Line Arrangement (FCL), which was approved on April 2, 2025 (see PR 25/085). The authorities have consented to the publication of the Staff Report prepared for this consultation.[2]
Real GDP growth in 2025 accelerated to an estimated 4.9 percent, supported by a rebound in agricultural output and a surge in large-scale infrastructure projects. Nonetheless, high unemployment remains a significant challenge. Average inflation remained low at 0.8 percent, allowing Bank Al-Maghrib to maintain a neutral policy stance after earlier rate cuts. The current account widened to 2.1 percent of GDP as imports rose with investment, partly offset by buoyant tourism. Strong revenue performance facilitated a smaller than anticipated overall fiscal deficit at 3.5 percent of GDP, despite higher than budgeted spending on public investment and transfers for state-owned enterprises.
Looking ahead, the growth outlook remains strong, supported by robust domestic drivers. Real GDP growth is projected at 4.4 percent for 2026, 4.5 percent for 2027, and 4 percent over the medium term, assuming normalized agriculture production and continued infrastructure investment with greater private sector participation. The growth outlook in the near term is dampened by the ongoing conflict in the Middle East, which affects Morocco mainly through disruptions to global commodity markets and weaker global demand amid heightened global uncertainty. Inflation is expected to rise temporarily during the year from its currently low levels, mainly reflecting higher energy prices, before settling at around 2 percent over the medium term. Given the high import content of infrastructure investment and higher cost of commodity imports, the current account deficit is expected to widen moderately. International reserves levels are expected to remain adequate. The overall fiscal deficits for 2026 and the medium term are consistent with a gradual reduction in debt to GDP to 60.5 percent by 2031.
Risks to the outlook have increased on the downside amid high external uncertainty. External risks to the outlook include increased commodity price volatility amid global uncertainty and the ongoing conflict in the Middle East, as well as higher trade barriers and global supply chain disruptions that could weigh on activity in the Euro Area. Domestically, the main risk arises from weaker-than-expected economic gains from the implementation of public infrastructure investment, which would result in subdued growth and employment. If downside risks were to materialize, available policy space together with the FCL would help the economy adjust smoothly.
Following the Executive Board discussion, Kenji Okamura, Deputy Managing Director and Chair, made the following statement:
“The Moroccan economy continued to demonstrate strong resilience. Agriculture, construction, and tourism boosted economic activity in 2025. The growth momentum is projected to remain strong in 2026 and over the medium term, supported by public and private infrastructure investment. However, in the near term, growth would be impacted by the ongoing conflict in the Middle East through higher energy prices and weaker external demand. In the face of heightened geopolitical tensions and global uncertainty, it is essential to maintain prudent macroeconomic policies, carefully manage fiscal and economic risks, increase investment in human capital, and ensure steadfast implementation of structural reforms to boost inclusive growth and job creation.
“Morocco continues to meet the qualification criteria for the Flexible Credit Line arrangement. Morocco has a sustained track record of implementing very strong macroeconomic policies and remains committed to maintaining such policies in the future, and continues to have very strong economic fundamentals and institutional policy frameworks. The authorities intend to continue treating the FCL arrangement as precautionary and to gradually exit it, depending on the evolution of external risks.”
READ MORE: https://www.imf.org/en/news/articles/2026/03/23/pr26086-morocco-imf-concludes-2026-aiv-consultation-and-mid-term-rev-under-fcl-arrangement
