IMF Staff Country Reports

This 2022 Article IV Consultation discusses that the drought and economic fallout from Russia’s war in Ukraine took a toll on Morocco’s economy in 2022, despite the authorities’ very strong policy response. Despite the increase in current spending from higher subsidies and other policy measures that mitigated the economic impact of the shocks, the overall fiscal deficit is projected to fall in 2022. Gross domestic product growth is projected to accelerate to 3 percent in 2023, mainly driven by the rebound in agricultural output and its positive spillovers to the rest of the economy. Limited fiscal and monetary policy space and high uncertainty call for accelerating structural reforms to strengthen the resilience of Morocco’s economy. Significant progress has been achieved in a number of areas, with reforms that have the potential to boost domestic demand and increase Morocco’s growth potential over the medium term. Important steps have been made toward expanding social protection to all Moroccans and better targeting assistance through the introduction of a Unified Social Registry. Progress in liberalizing the electricity market should accelerate the transition to renewable energy, while much remains to be done to address the increasing scarcity of water resources and reduce gender gaps.