The International Monetary Fund Executive Board concluded the 2026 Article IV consultation with Morocco and completed the mid-term review under Morocco’s Flexible Credit Line (FCL) arrangement approved on 2 April 2025, confirming that Morocco continues to meet the FCL qualification criteria. The review highlights a strong growth outlook supported by agriculture and infrastructure investment, alongside persistent unemployment and heightened downside risks linked to external uncertainty. Real GDP growth in 2025 is estimated at 4.9 percent and is projected at 4.4 percent in 2026, with inflation averaging 0.8 percent in 2025 as Bank Al-Maghrib maintained a neutral stance after earlier rate cuts. The current account deficit widened to 2.1 percent of GDP in 2025 as imports rose with investment, while strong revenue performance contributed to a smaller-than-anticipated overall fiscal deficit of 3.5 percent of GDP despite higher public investment and transfers to state-owned enterprises. IMF staff projections assume inflation rises temporarily on higher energy prices before settling around 2 percent over the medium term, with fiscal deficits consistent with a gradual decline in debt to GDP to 60.5 percent by 2031, and identify priorities including managing risks from scaled-up public investment, strengthening human capital, rebuilding fiscal buffers, and advancing reforms to support private-sector-led job creation. Morocco consented to publication of the staff report for the consultation, which the IMF indicated will be published shortly. The authorities intend to continue treating the FCL as precautionary and to gradually exit the arrangement depending on the evolution of external risks.

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