Morocco

Macroeconomic conditions have improved since 2012 despite sluggish growth. In 2016, growth slowed due to a sharp contraction in agricultural output and subdued non-agricultural activity; the fiscal deficit is estimated to have declined to 3.5 percent of GDP; the current account deficit widened slightly to 2.9 percent of GDP; and international reserves strengthened to about seven months of imports. Reforms are advancing, including of the public pension system and the transition to a new exchange rate and monetary regime. Banks are adequately capitalized, but non-performing loans (NPLs) are increasing and credit concentration risks need to be reduced.