The Moroccan economy “once again showed resilience to negative shocks in 2023, as economic activity accelerated, inflation slowed, and the current account deficit narrowed despite headwinds from water scarcity, the September 2023 earthquake, and lower growth in the Euro Area,” the IMF pointed out Wednesday in a release.

Directors were encouraged by the authorities’ “progress” on meeting the conditions of the RSF arrangement, the statement said, adding that they also welcomed the ongoing work related to the national water program and the plans to achieve zero net emissions by 2050.

“Directors agreed that Morocco continues to meet the qualifications criteria for the FCL arrangement, given its very strong macroeconomic policies and institutional policy frameworks, and its commitment to continuing reforms,” the international financial institution stressed.

The “ambitious” infrastructure plan announced by the authorities – including in water and energy sectors – is expected to boost investment and growth in the next few years, with the current account gradually converging towards the medium-term norm, it said.

The fiscal deficit in 2023 was below the level projected in the Budget and the authorities reiterated their commitment to a gradual fiscal consolidation over the next three years, the release underlined, noting that the implementation of the structural reform agenda has continued, particularly regarding the overhaul of social protection, health care, and education systems.

Executive Directors commended the authorities’ “very strong” macroeconomic policies and institutional frameworks, which supported the pick-up in growth and decline in inflation, according to the same source.

Directors supported Bank Al-Maghrib’s (BAM) monetary policy stance and welcomed Morocco’s “progress” in strengthening its financial supervisory and regulatory framework.

They also commended the authorities’ efforts in introducing capital surcharges, developing a secondary market for NPLs, improving the bank resolution framework, and preparing a green financial strategy.

Directors commended the authorities’ strong commitment to implement structural reforms, the release said, adding that the reform of the social protection, health, and education systems would improve fairness and quality of access and sustain human capital in the long run.