According to the latest findings from the International Monetary Fund (IMF), Morocco is projected to face a temporary increase in inflation over the medium term, primarily due to rising energy prices. Currently, the nation enjoys low inflation levels, with an average rate of just 0.8 percent in 2025. However, projections indicate that this figure may climb to approximately 2 percent in the medium term, as noted in the IMF's recent Article IV consultation report.
In terms of economic growth, the IMF forecasts a real GDP growth rate of 4.4 percent for 2026, followed by 4.5 percent in 2027, and an average of 4 percent over the medium term, contingent upon stable agricultural production and ongoing infrastructure investments that include significant participation from the private sector. IMF Deputy Managing Director Kenji Okamura pointed out that the growth trajectory is likely to be influenced by the ongoing geopolitical tensions in the Middle East, which have contributed to elevated energy prices and diminished external demand.
The conflict between the US and Israel, alongside Iran, has led to a spike in crude oil prices, reaching as high as $120 per barrel before experiencing a subsequent decline, largely attributed to supply constraints as Tehran has targeted energy and water projects across the Gulf region. Furthermore, the IMF has assessed Morocco’s fiscal outlook for 2026 and the medium term, suggesting that overall fiscal deficits align with a gradual reduction in the debt-to-GDP ratio by 2031.
However, recent reports from Morocco's economy and finance ministry indicate a troubling surge in the budget shortfall, which ballooned to nearly MAD34.5 billion (approximately $3.7 billion) during January and February of this year, up from MAD24.8 billion in the same timeframe last year. This increase is largely a result of escalated spending on projects associated with Morocco's preparations for hosting the 2030 FIFA World Cup, compounded by declining revenue. The economic outlook for Morocco remains precarious, facing external challenges such as heightened volatility in commodity prices, persistent regional conflicts, rising trade barriers, and ongoing disruptions in global supply chains.
In light of these challenges, Okamura advised the Moroccan government to adhere to prudent macroeconomic policies, actively manage fiscal and economic risks, enhance investments in human capital, and implement structural reforms aimed at stimulating growth and job creation. In a proactive measure, the IMF approved a $4.5 billion flexible credit line for Morocco in April 2025, intended to assist the country in rebuilding its financial buffers and expediting structural reforms amidst an uncertain global environment.
The Moroccan government has expressed its intention to treat this flexible credit line as a precautionary measure and to gradually phase it out as the external risk landscape evolves. This strategy underscores the need for cautious economic management as the country navigates through a complex array of challenges.
As reported by agbi.com.
