- The IMF Executive Board approved the second review of Morocco's Resilience and Sustainability Facility (RSF) arrangement, allowing for an immediate purchase of SDR 312.5 million (about US$415 million).
- The authorities continue to show strong commitment to Morocco's transition to a greener economy.
Washington, DC: On November 11, 2024, the Executive Board of the International Monetary Fund (IMF) completed the second review under the Resilience and Sustainability Facility (RSF) arrangement for Morocco. [1] The completion of the review allows the authorities to draw the equivalent of SDR 312.5 million (about US$415 million), bringing total disbursement under the program to SDR 562.5 million (about USD 747 million).
While agricultural output suffered yet another drought in 2024, non-agricultural output has remained robust, and domestic demand is strengthening. The loss of jobs in the agricultural sector is keeping unemployment at a higher level than before the pandemic. Inflationary pressures have abated, and Bank Al-Maghrib (BAM) has cut the policy rate in June 2024. The fiscal deficit is on track to meet the 2024 budget target, with increased current spending offset by stronger-than-expected revenues. Strong revenues from tourism, exports of goods, and remittances have kept the current account deficit at low levels.
Morocco continues to make progress in bolstering its resilience against climate change and seizing the opportunities from decarbonization, under the RSF arrangement. Significant investments in water infrastructure aim at addressing water scarcity and will need to be complemented by demand management reforms. Continued progress toward liberalizing the electricity markets, a key dimension of the RSF, is needed to boost private sector participation in renewable energies. This will not only help Morocco achieve its Nationally Determined Contributions (NDC) targets but would also reduce its reliance on imported fuels, improve firms' competitiveness, and help create jobs.
Following the Executive Board's discussion on Morocco, Mr. Kenji Okamura, Deputy Managing Director and Acting Chair, issued the following statement:
"The Moroccan authorities continue to make steady progress on strengthening Morocco's resilience to climate change, underpinned by very strong fundamentals and policy frameworks and a sustained track record of effective policy implementation. The performance under the Resilience and Sustainability Facility (RSF) arrangement has been strong. The authorities are cognizant of Morrocco's high exposure to risks related to climate change and natural disasters and remain committed to the green transition and further strengthening climate resilience.
"The focus on decarbonization, while limiting the impact on the most vulnerable, is welcome. In the current socioeconomic context with still elevated food prices and high unemployment, it appears more socially acceptable to pursue increases in excises on coal and other highly polluting products than a higher value-added tax (VAT) on fossil fuels. The planned replacement measure will provide an important price signal consistent with the authorities' decarbonization objectives. The estimated potential contribution of the new measure to the reduction of GHG emissions is also comparable to that of the old measure, preserving the overall strength of the RSF arrangement.
"The timely implementation of remaining measures under the RSF arrangement will be crucial for supporting Morocco's green transition. Efforts should focus on further liberalizing the electricity sector, greening the tax system, addressing the risks that climate change pose to the stability of the fiscal and financial systems, and protecting the country's diminishing groundwater resources. The recently published Climate Finance Development Strategy 2030 has an important role in mobilizing private climate finance."
Morocco: Selected Economic Indicators, 2022–24 |
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Population: 37.0 million; 2023 |
Per capita GDP: $3,901; 2023 |
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Quota: SDR 894.4 million |
Poverty rate: 4.8 percent; 2013 |
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Main exports: automobiles, phosphate and derivatives; 2023 |
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Key export markets: France and Spain (42.8% of total trade); 2023 |
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2022 |
2023 |
2024 |
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Proj. |
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Output (annual percent change) |
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Real GDP growth |
1.5 |
3.4 |
2.6 |
|
Real nonagricultural GDP growth |
3.2 |
3.6 |
3.6 |
|
Employment (percent) |
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Unemployment |
11.8 |
13.0 |
13.2 |
|
Prices |
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Inflation (end of period) |
8.3 |
3.4 |
2.1 |
|
Inflation (period average) |
6.6 |
6.1 |
1.5 |
|
Central government finances (percent of GDP) 1/ |
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Revenue |
28.7 |
28.4 |
28.7 |
|
Expenditure |
34.1 |
32.8 |
33.0 |
|
Fiscal balance |
-5.4 |
-4.4 |
-4.3 |
|
Public debt |
71.5 |
69.5 |
69.1 |
|
Money and credit (annual percent change) |
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Broad money |
8.0 |
3.9 |
5.0 |
|
Claims to the economy 2/ |
7.1 |
5.2 |
4.5 |
|
Balance of payments |
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Current account including official transfers (percent of GDP) |
-3.6 |
-0.6 |
-1.5 |
|
Exports of goods (in U.S. dollars, annual percent change) |
15.1 |
-0.5 |
6.9 |
|
Imports of goods (in U.S. dollars, annual percent change) |
21.9 |
-2.5 |
6.9 |
|
Merchandise trade balance (percent of GDP) |
-20.2 |
-17.4 |
-17.1 |
|
FDI (percent of GDP) |
1.2 |
0.2 |
0.9 |
|
Gross reserves (months of imports) |
5.3 |
5.5 |
5.5 |
|
External Debt (percent of GDP) |
50.9 |
47.1 |
44.6 |
|
Exchange rate |
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REER (annual average, percent change) |
-3.8 |
1.4 |
... |
|
Memorandum Items: |
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Nominal GDP (in billions of U.S. dollars) |
131.0 |
144.4 |
156.8 |
|
Net imports of energy products (in billions of U.S. dollars) |
-15.1 |
-12.0 |
-11.7 |
|
Local currency per U.S. dollar (period average) |
10.2 |
10.1 |
... |
|
Sources: Moroccan authorities; and Fund staff estimates. |
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1/ Include grants. |
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2/ Includes credit to public enterprises. |
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[1] Approved by the IMF Executive Board on September 28, 2023 for an amount of SDR 1 billion (about US$1.3 billion) (see press release No. 23/327)
