The International Monetary Fund has warned that in the near term, growth in Morocco would be impacted by the ongoing conflict in the Middle East.
The Executive Board of the IMF concluded last week the 2026 Article IV consultation with Morocco and completed the Mid-Term Review under the Flexible Credit Line Arrangement (FCL), which was approved on April 2, 2025.
The Staff Report issued on Monday said that 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.
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, the IMF said.
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 IMF lauded strong revenue performance that facilitated a smaller than anticipated overall fiscal deficit at 3.5 percent of GDP.
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.
The current account widened to 2.1 percent of GDP as imports rose with investment, partly offset by buoyant tourism.
“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,” the IMF said.
“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,” said IMF Deputy Managing Director and Chair Kenji Okamura.
