International Monetary Front: Reforms and infrastructure plan support growth
The IMF remains confident in its updated outlook for the Moroccan economy. Growth is expected to slow to 2.6% in 2024. If all goes well, the curve should rise to 3.7% in 2025, before stabilizing at its medium-term rate of 3.5%.
The Monetary Fund’s new forecasts assume a return to average harvest conditions in the future. This implies a rebound in agricultural production in 2025 after this year’s contraction, and stabilization at around 2.5% growth in the medium term. Growth in the non-agricultural sector is expected to reach around 3.5% over the next few years. Lower inflation and the generalization of the social protection system should support private consumption. While ambitious infrastructure plans (notably in the water, energy, and transport sectors) and ongoing business-friendly reforms should stimulate investment. Stronger domestic demand should in turn boost imports and gradually widen the current account deficit to its estimated norm of around 3% of GDP. Headline CPI inflation is forecast at 2.1% (year-on-year) by the end of 2025, taking into account the impact of the phasing-out of butane gas subsidies.
The risks to GDP growth are broadly balanced. Further droughts and a drop in agricultural production remain the biggest risks. In addition to an escalation of geopolitical tensions and their impact on external demand. On the other hand, a more successful implementation of the structural reform program and a greater multiplier effect of the vast infrastructure plan (AFCON 2025 and World Cup 2030…) could propel growth towards a faster medium-term trajectory than currently anticipated.
The goods trade deficit for the first eight months of the year remained relatively stable compared to the same period last year. Growth in exports slightly outstripped that of imports, thanks to the good performance of aerospace and automotive exports, as well as a recovery in exports of phosphates and their derivatives.
According to the IMF’s assessment, Morocco’s debt is assessed as sustainable with high probability, and its risk of sovereign stress is assessed to be moderate.
Fatim-Zahra TOHRY
