IMF Executive Board Concludes 2015 Article IV Consultation with Morocco
Press Release No. 15/568
December 16, 2015

On December 14, 2015, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation with Morocco.1

Morocco’s macroeconomic situation continues to improve. After declining to 2.4 percent in 2014, growth is expected to recover to 4.7 percent in 2015, thanks to a good agricultural season and improvements in construction activity. However, nonagricultural growth remains sluggish, including in sectors related to tourism, which are affected by geopolitical risks, and some traditional manufacturing, such as textiles. The unemployment rate picked up slightly to 10.1 percent in Q3 2015, and youth unemployment is particularly high, at 21.4 percent. Headline inflation (y-o-y) remained low at 1.4 percent in October, reflecting lower food prices.

External imbalances have fallen substantially. The current account deficit is expected to narrow to 1.5 percent of GDP in 2015 (against 5.7 percent in 2014). Strong phosphate and newly developed industries’ exports, and lower energy and food imports, as well as strong remittances, are more than offsetting the impact of declining tourism revenues. As a result and with continued robust FDI, international reserves are now close to 6.5 month of imports.

Fiscal consolidation has continued, and the authorities appear to be on track to meet the fiscal deficit objective of 4.3 percent of GDP in 2015, down from 4.9 percent in 2014. This reflects lower wage and subsidy spending (thanks to declining oil prices and the full implementation of energy subsidy reforms), which offset the decline in grant and tax revenues due to lower VAT on imported goods.

The financial sector remains well capitalized and profitable. Banking sector capital adequacy ratios stood at 13.8 percent in June 2015, well above the Basel III requirement. Bank profitability is stable, and while nonperforming loans have increased, they are adequately provisioned. Morocco’s medium-term prospects are favorable, with growth projected to get close to 5 percent by 2020, although risks remain, such as that of lower growth in the euro area or increased international oil prices. Stronger medium term growth will hinge on continued implementation of comprehensive reforms with regard to labor participation and labor market efficiency, access to finance, quality education, efficiency of public spending, and further improvements to the business environment. Finally, better healthcare coverage, continued poverty reduction, and lower regional and gender disparities will also be crucial to achieve a sustainable and more inclusive growth.

Executive Board Assessment2

Executive Directors commended the authorities for their prudent macroeconomic management and the ongoing improvements to the policy framework which have helped yield positive outcomes, including strengthened fiscal and external buffers, a recovery of growth, and progress on unemployment and poverty reduction. The medium term outlook is favorable but remains vulnerable to fragile external conditions and geopolitical risks. Directors welcomed the authorities’ continued strong commitment to sound policies and encouraged them to move forward with reforms to further reduce vulnerabilities and promote stronger job creation and more inclusive growth.

Directors recognized the progress made in fiscal consolidation. They encouraged the authorities to continue their efforts to gradually reduce the level of public debt over the medium term, while preserving fiscal space for pro-growth and social spending. In this context, Directors supported steps to further reduce wage and subsidy spending, while protecting the most vulnerable segments of the society; advance tax and pension reforms; and improve the efficiency of public spending. Directors welcomed the new organic budget law which will strengthen the fiscal framework by improving accountability and transparency. They advised the authorities to move carefully with the fiscal decentralization process.

Directors endorsed the current monetary policy stance in the context of low inflation and slow credit growth. They encouraged the authorities to finalize the revision of the new central bank law, which will strengthen its independence and expand its supervisory powers and mandate. Directors supported the authorities’ intention to move gradually to a more flexible exchange rate regime and new monetary policy framework, noting that this will help preserve competitiveness and better insulate the economy against shocks. Continued efforts to promote financial market deepening will strengthen monetary policy transmission.

Directors noted that the banking sector remains sound and resilient to adverse economic shocks but stressed that rising non-performing loans and credit concentration risks require continued monitoring. They welcomed Bank Al Maghrib’s (BAM) efforts to strengthen the financial regulatory and supervisory framework by implementing the new banking law and taking steps to implement the recent Financial Sector Assessment Program recommendations. Directors looked forward to further progress in improving cross border bank supervision, tightening rules for consolidated risk management, strengthening the bank resolution framework, and fostering financial inclusion. They supported BAM’s intention to strengthen its supervisory resources in view of its expanding responsibilities.

Directors emphasized the importance of sustained implementation of structural reforms to promote higher and more inclusive growth. Continued efforts to improve the business environment, as well as reform of the labor market, and increased efficiency of public spending on education, will be critical to bolster growth, reduce unemployment, especially among the youth, and strengthen competitiveness. Directors welcomed the progress made to reduce government bureaucracy and the forthcoming national strategy to fight corruption, and looked forward to further progress on promoting good governance.

Morocco: Selected Economic Indicators, 2011–16


  2011   2012   2013   2014   2015   2016

(Annual percentage change)

Output and Prices


Real GDP

5.2   3.0   4.7   2.4   4.7   3.1

Real agriculture GDP

5.7   -9.1   17.9   -2.5   15.2   -1.8

Real non-agriculture GDP

5.2   4.7   3.0   3.1   3.3   3.8

Consumer prices (end of period)

0.9   2.6   0.4   1.6   1.6   1.3

Consumer prices (period average)

0.9   1.3   1.9   0.4   1.6   1.5
              (In percent of GDP)

Investment and Saving


Gross capital formation

35.8   35.0   34.7   33.7   33.3   34.5

Of which: Nongovernment

30.5   29.6   29.6   28.3   28.6   29.4

Gross national savings

27.9   25.5   26.8   28.0   31.8   33.8

Of which: Nongovernment

27.6   25.9   25.3   26.0   29.9   30.6
              (In percent of GDP)

Public Finances



27.2   28.0   27.7   28.0   25.6   26.4


33.8   35.3   32.9   33.0   29.8   29.9

Budget balance

-6.6   -7.3   -5.2   -4.9   -4.3   -3.5

Primary balance (excluding grants)

-4.5   -4.9   -3.3   -3.7   -2.5   -2.2

Cyclically-adjusted primary balance (excl. grants)

-4.6   -5.0   -2.8   -3.7   -2.2   -2.0

Total government debt

52.5   58.3   61.5   63.4   63.6   64.4

(Annual percentage change; unless otherwise indicated)

Monetary Sector


Credit to the private sector 1/

9.8   4.8   3.8   2.5   3.3   4.3

Base money

5.7   -0.5   9.0   6.2   5.5   6.5

Broad money

6.4   4.5   3.1   6.2   5.5   6.5

Velocity of broad money

0.9   0.9   0.9   0.9   0.9   0.9

Three-month treasury bill rate (period average, in percent)

3.4   3.4   3.4   2.5   ...   ...
      (In percent of GDP; unless otherwise indicated)

External Sector


Exports of goods and services (in U.S. dollars, percentage change)

17.0   0.4   4.0   7.4   -10.4   5.9

Imports of goods and services (in U.S. dollars, percentage change)

23.4   2.2   4.3   1.0   -18.9   4.5

Merchandise trade balance

-21.0   -22.3   -20.5   -18.7   -13.5   -13.5

Current account excluding official transfers

-8.2   -9.8   -8.6   -7.4   -2.4   -2.0

Current account including official transfers

-7.9   -9.5   -7.9   -5.7   -1.5   -0.7

Foreign direct investment

2.4   2.4   2.8   2.8   2.6   2.7

Total external debt

26.1   28.5   29.2   32.7   31.9   32.7

Gross reserves (in billions of U.S. dollars)

20.6   17.5   19.3   20.4   23.5   28.8

In months of next year imports of goods and services

5.3   4.3   4.7   6.1   6.7   7.6

In percent of Fund reserve adequacy metric

111.2   88.1   91.0   94.2   110.9   128.6

Memorandum Items:


Nominal GDP (in billions of U.S. dollars)

101.4   98.3   107.2   110.0   103.5   108.4

Unemployment rate (in percent)

8.9   9.0   9.2   9.9    

Population (millions)

32.2   32.6   33.0   33.3   33.7   34.0

Population growth (in percent)

    1.1   1.1   1.1   1.1   1.0

Net imports of energy products (in billions of U.S. dollars)

-11.2   -12.4   -12.2   -11.0   -6.6   -6.7

Local currency per U.S. dollar (period average)

8.1   8.6   8.4   8.4   ...   ...

Real effective exchange rate (annual average,


percentage change) 2/







0.1   0.0   ...

Sources: Moroccan authorities; and IMF staff estimates.


1/ Includes credit to public enterprises.


2/ For 2015, actual value as of August 2015


1 Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

2 At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summing up can be found here:


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