Morocco’s economy expected to grow by 3.9% in 2025

Morocco's economic growth is projected to reach 3.9% in 2025, following an estimated 3.2% expansion in 2024, according to the International Monetary Fund (IMF). This outlook was presented by Roberto Cardarelli, head of the IMF mission to Morocco, during recent consultations conducted from January 27 to February 7 under Article IV.

The growth forecast is driven by a rebound in agricultural production following recent droughts and sustained expansion in the non-agricultural sector, supported by strong domestic demand. Additionally, a stronger economic performance is expected to bring the current account deficit closer to 3%, while inflation should stabilize at around 2%.

Despite uncertainties stemming from geopolitical tensions and climate change, the overall risk balance remains stable. The IMF considers Morocco’s current monetary policy stance appropriate, as inflation expectations remain anchored at 2%, with no significant signs of demand-driven inflationary pressures. Future interest rate adjustments, according to the IMF, should continue to be data-driven.

The report highlights the positive impact of recent fiscal and tax administration reforms, which have broadened the tax base and reduced fiscal pressure, resulting in higher-than-expected tax revenues in 2024. The budget deficit was recorded at 4.1% of GDP, lower than the 4.3% projected in the Finance Law. Moving forward, the IMF suggests that any surplus revenues should be used to accelerate debt reduction to pre-pandemic levels.

Efforts should also be intensified to further expand the tax base and optimize public spending, particularly by reducing financial transfers to state-owned enterprises as part of ongoing sectoral reforms. Expanding the use of the unified social register across all social programs is also recommended to support structural reforms.

The IMF commends Morocco’s ongoing reform of the organic finance law, which introduces a medium-term debt anchoring rule and integrates climate risk assessments into the fiscal framework. The Fund encourages authorities to build on these advancements by providing more details on the impact of new fiscal measures and the risks associated with increased reliance on public-private partnerships (PPPs).

Regarding employment, the IMF emphasizes the need for a new approach to labor market policies, focusing on the growth of small and medium-sized enterprises (SMEs) and their integration into value chains. The IMF also acknowledges the progress made in implementing the Mohammed VI Investment Fund, which aims to facilitate SME access to equity financing.

To further support private sector development, the IMF recommends strengthening SME assistance through the new investment charter, enhancing regional investment centers to improve access to financial and technical resources, and revising labor laws, the tax system, and regulatory frameworks. The reform of state-owned enterprises should also ensure a level playing field between public and private sector firms.

During its mission, the IMF team held discussions with senior Moroccan government officials, representatives of the central bank, and stakeholders from both the public and private sectors.