The International Monetary Fund (IMF) recommended on Tuesday that Morocco’s central bank, Bank Al-Maghrib (BAM), adopt inflation-targeting measures and that the Moroccan government broaden the tax base and reduce transfers to state-owned enterprises to strengthen fiscal stability.
The IMF’s recommendations come on the heels of this year’s 2025 Article IV consultations conducted by an IMF team led by Roberto Cardarelli with senior Moroccan government officials, BAM, and representatives of the public and private sectors, which took place in Rabat from January 27 to February 7.
With inflation stabilizing at around 2%, the IMF advised BAM to continue developing an inflation-targeting framework. The report noted that the bank’s current, neutral monetary policy remains appropriate, but future interest rate adjustments should be data-driven to maintain economic stability.
Morocco’s tax reforms have led to higher-than-expected revenues, helping to lower the fiscal deficit to 4.1% of GDP, below the 4.3% originally projected in the 2024 budget. However, the IMF highlighted the need for further fiscal adjustments to ensure sustainable debt reduction.
The report recommended that Morocco use additional tax revenues to accelerate debt reduction and bring it closer to pre-pandemic levels, to continue expanding the tax base and improve spending efficiency, to reduce public transfers to state-owned enterprises, and to extend the use of the Unified Social Registry (RSU) to enhance targeted social assistance.
The IMF highlighted the urgency of addressing unemployment, particularly for workers displaced from the agricultural sector due to recurring drought. It called for active labor market policies to support job transitions and workforce integration.
To boost small and medium-sized enterprises (SMEs) and encourage private sector growth, the IMF recommended strengthening SME support programs under the New Investment Charter, enhancing the role of regional investment centers to provide better financial and technical assistance, reforming the labor code, tax system, and regulatory framework to eliminate barriers preventing businesses from expanding and advancing the state-owned enterprise (SOE) reform to ensure fair competition among public and private firms.
The IMF commended Morocco for incorporating climate risk assessments into its medium-term fiscal planning. It also encouraged greater transparency in assessing the financial risks associated with Public-Private Partnerships (PPPs), particularly as Morocco expands the use of PPPs in infrastructure development projects.
During the consultations, Cardarelli applauded Morocco’s commitment to economic reforms and expressed the team’s appreciation for having had constructive discussions.
The IMF’s recommendations further Morocco’s long-term economic strategy that relies on monetary stability, fiscal discipline, and structural reforms to enhance economic resilience and drive sustainable growth.
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