Morocco: 2022 Article IV Consultation-Press Release and Staff Report
IMF Staff Country Reports, January 24, 2023
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Bibliographic details
- Published: January 24, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400231247.002
Key findings
- 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.
Macroeconomic outlook and risks
- Growth projection:
- Gross domestic product growth is projected to accelerate to 3 percent in 2023.
- Major shocks and transmission:
- Drought and Russia–Ukraine war fallout materially affected 2022 performance.
- Policy space and uncertainty:
- Limited fiscal and monetary policy space and high uncertainty underscore the need for accelerated structural reforms.
Fiscal stance and public finances
- Fiscal developments in 2022:
- Increase in current spending from higher subsidies and other policy measures occurred.
- Overall fiscal deficit is projected to fall in 2022 despite higher current spending.
- Policy implications:
- Continued attention to fiscal sustainability is implied given limited fiscal space.
Structural reforms, social protection, and inclusion
- Social protection:
- Important steps made toward expanding social protection to all Moroccans and better targeting assistance through the introduction of a Unified Social Registry.
- Structural reforms:
- Reforms achieved have potential to boost domestic demand and increase medium-term growth potential.
- Gender and resource constraints:
- Much remains to be done to reduce gender gaps and to address increasing scarcity of water resources.
Energy and resource management
- Electricity market:
- Progress in liberalizing the electricity market should accelerate the transition to renewable energy.
- Water scarcity:
- Increasing scarcity of water resources remains a key challenge requiring further action.
Morocco: 2022 Article IV Consultation-Press Release and Staff Report, IMF.
Content in this bundle
- 1marea2023001