HIBAPRESS
The International Monetary Fund expects the strong growth momentum in Morocco to continue in 2026, supported by public and private investment, and abundant agricultural production.
A statement issued on Thursday at the end of a consultation mission conducted by a team from the International Monetary Fund with the Moroccan authorities (January 29 – February 11) under Article IV for 2026, stated that "economic growth during 2025, which is estimated at 4.9 percent, was boosted by the strength of the agriculture, construction, and services sectors. This momentum is expected to continue in 2026, with an expected growth of 4.9 percent, supported by public and private investments and abundant agricultural production after exceptional rainfall." The International Monetary Fund team noted that the continued strong performance of revenues, along with the redirection of spending priorities, will enable margins to increase investment in human capital and contribute to rebuilding budgetary margins. It also indicated that overall inflation averaged 0.8 percent in 2025, reflecting a decline in food inflation, and is expected to rise gradually to 2 percent by mid-2027, driven by previous cuts in the main interest rate and strengthening growth momentum. It added that, taking into account the strength of the import component included in the increasing public investments, the current account deficit is expected to widen moderately, despite the increase in tourism revenues, and will be partially financed through a rise in foreign direct investment, considering that the level of international reserves remains "adequate." The mission classified the risks overshadowing the economic outlook as "generally balanced," noting that they will concern a possible slowdown in the Eurozone and fluctuations in the prices of raw materials. The statement affirmed that customs revenues reached 24.6 percent of the gross domestic product in 2025, a significant increase over the past two years, as a result of recent reforms in tax policy and improved revenue management. The central government budget deficit decreased to 3.5 percent of the gross domestic product, compared to the 3.8 percent expected in the 2025 budget, although a portion of the revenue surplus was used to finance additional investments and transfers to public institutions and companies. In this regard, the International Monetary Fund team considered that in the future, "at least a portion of this surplus should be allocated to further strengthen financial margins." It added that "alongside the restructuring of expenditures, this can also free up margins to increase investment in human capital." On the other hand, the International Monetary Fund mission highlighted that access to education, health services, and social protection for the most vulnerable groups continues to improve and encouraged accelerating the ongoing reforms in these sectors. It affirmed that "fully benefiting from the opportunities provided by accelerating public investment requires careful management of risks – including budgetary and economic risks – and increased investment in human capital, especially in the areas of health and education." The International Monetary Fund mission praised the progress made in strengthening the medium-term financial framework and in managing public investment, especially steps aimed at adopting a new budgetary rule, noting that efforts should continue to be made to identify, measure, and monitor budgetary risks systematically – especially those related to public institutions and companies – with better communication at the level of the medium-term budget framework." The International Monetary Fund team believes that with good control over inflation, the generally neutral stance of monetary policy remains appropriate, and it is expected to continue to rely on the available data, expressing its encouragement to Bank Al-Maghrib "to continue its transition towards greater flexibility in the exchange rate, while moving forward towards inflation targeting." The mission also praised the "carefully sequenced reforms" targeting non-performing loans, calling for continued efforts to strengthen the resilience of the financial system in order to address emerging risks. On the other hand, the International Monetary Fund team considered that creating sustainable jobs remains "a major challenge that requires reforms that promote a more dynamic private sector and a better response to the labor market." In this context, "accelerating the reforms of public institutions and companies aimed at improving their performance and governance is necessary to increase competition and ensure market neutrality between public and private companies." The mission also commended the precise targeting of financial and technical support provided to small and medium-sized enterprises through the investment charter, regional investment centers, the Mohammed VI Investment Fund, and the new charter for small and medium-sized enterprises, calling for careful follow-up of employment results. The mission praised the continuous implementation of the "Employment Roadmap 2030," which provides a comprehensive framework for reducing unemployment through the modernization of active labor market policies, providing increased support for young people without certificates, and encouraging complementary measures to bridge the skills gap.
