IMF Approves $496 Million Loan for Morocco

The International Monetary Fund (IMF) has approved a $496 million loan for Morocco under the third installment of the Resilience and Sustainability Facility.

According to a statement released by the IMF on Tuesday in Washington, Morocco’s economy continues to demonstrate resilience despite facing another year of drought.

The fund expects Morocco’s economic growth to accelerate in the medium term, driven by significant investments and ongoing structural reforms.

With this latest installment, the total funding allocated to Morocco under the program now stands at about $1.24 billion.

IMF Deputy Managing Director and Acting Chair of the Executive Board, Kenji Okamura, stated that Morocco’s economy has remained strong in the face of external shocks, highlighting the effectiveness of the country’s economic policies and frameworks.

Despite the drought, Morocco’s economy slowed only slightly, with GDP growth expected to reach 3.2% in 2024 compared to 3.4% in 2023.

Growth is projected to accelerate to around 3.7% in the coming years, supported by new infrastructure projects and continued structural reforms.

These reforms are essential to making economic growth more resilient, job-generating, and inclusive.

However, the IMF noted that Morocco’s current account deficit has widened slightly, while the unemployment rate remains high at around 13%, particularly due to job losses in the agricultural sector.

Inflation continued to decline in 2024 as supply shocks eased, prompting Morocco’s central bank to cut its benchmark interest rate twice, in June and December. The Moroccan dirham also remained stable within its fluctuation band of around 5%.

The country’s fiscal deficit improved more than expected in the 2024 budget, reaching 4.1% of GDP—about 0.2% lower than initial forecasts.

This improvement was driven by higher-than-expected tax revenues, which helped offset increased spending.

The IMF also highlighted the government’s plan to introduce a new budgetary framework to guide medium-term debt management.

Morocco is advancing with key structural reforms, including restructuring state-owned enterprises, implementing the Mohammed VI Investment Fund, and rolling out a new investment charter.

The IMF also commended Morocco’s progress in strengthening resilience to climate change under the Resilience and Sustainability Facility.

Recent measures aim to improve groundwater resource protection, adjust water tariffs, enhance the regulatory framework for the electricity market to encourage private investment in renewable energy, and strengthen financial systems against climate-related risks.

With continued reforms and strategic investments, Morocco is on track to sustain economic growth while enhancing its resilience to both financial and environmental challenges.