## IMF Staff Completes 2024 Article IV Consultation with Morocco

_IMF News, February 21, 2024_

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## Bibliographic details
- Published: February 21, 2024

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### Mission and timing
- IMF staff team led by Roberto Cardarelli conducted discussions with the Moroccan authorities in Rabat from January 31 to February 15.
- Press Release No. 24/53; publication date: February 21, 2024.
- Team met with senior officials of the government of Morocco, Bank Al-Maghrib, and representatives of the public and private sectors.

### Macroeconomic performance and outlook
- Output growth:
  - "Economic growth has strengthened in 2023" driven by the recovery in domestic demand and buoyant exports.
  - Growth is "expected to increase gradually to around 3.5 percent over the medium term, boosted by stronger investment."
- External sector:
  - "Stronger domestic demand should gradually widen the current account deficit towards 3 percent of GDP."
- Inflation:
  - Inflation "is projected to continue to fall slowly as pressures on commodity and food prices fade."

### Monetary policy assessment
- IMF staff view:
  - "The current monetary policy stance is appropriate."
  - "Future changes to the monetary policy stance should remain data dependent."
  - Recommendation: "As inflation continues to fall, Bank Al-Maghrib should resume its transition to an inflation-targeting framework."

### Fiscal policy assessment and recommendations
- Fiscal stance:
  - Staff "welcomes the authorities' commitment to fiscal consolidation over the medium term."
  - "The gradual reduction of the fiscal deficit over the next three years appears appropriate."
- Measures and needed actions:
  - Raise tax revenues and further rationalize spending to rebuild fiscal buffers and finance structural reforms.
  - Complete the reform of the tax system, including of the VAT.
  - Improve tax administration.
  - Rationalize spending, including transfers to state-owned enterprises (SOEs).
  - Expand use of the Unified Social Registry to all social programs.
  - Assess, monitor, and report potential budgetary implications of future public private partnership programs related to infrastructure.
  - Add more information on revenues expected from mobilization of real government assets and quantify the impact of all new policy measures on the fiscal deficit over the next few years.

### Structural reforms and inclusive growth
- Key objectives:
  - Boost job creation and make growth more inclusive.
  - Accelerate reforms to the SOE sector.
  - Operationalize the Mohammed VI Fund and the new Charter of Investment to stimulate private investment.
  - Strengthen the fight against corruption and address anti-competitive practices.
  - Reform the unemployment insurance scheme and improve active labor market policies to boost short-run job creation.
  - Improve female labor force participation, which is "at historical lows."
  - Advance ambitious reforms of the health care sector and education system to improve access and quality and enhance long-term capital accumulation.
  - Further liberalize the electricity market to encourage the transition to renewable energy.
  - Address water scarcity via the authorities’ infrastructure plan, remodulation of water tariffs, and improved efficiency in water resource utilization.
  - Generalize social protection under the Unified Social Registry to better target social support.
  - VAT reform "is expected to improve neutrality and incentivize formality, expanding the tax base."

### Team statement and next steps
- End-of-mission note:
  - End-of-Mission press releases convey preliminary findings after a visit; the views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
  - Based on preliminary findings, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
- Acknowledgement:
  - The IMF team thanked the Moroccan authorities and other stakeholders for their hospitality and candid and productive discussions.

*Source: Press Release No. 24/53, February 21, 2024, IMF Communications Department.*

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## References

- [Morocco and the IMF](http://www.imf.org/external/country/MAR/index.htm)
- [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)
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- [PRESS CENTER](http://presscenter.imf.org/)
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_Source: https://www.imf.org/en/news/articles/2024/02/20/pr2453-morocco-imf-staff-completes-2024-article-iv-consultation_