Morocco

Macroeconomic vulnerabilities have declined since 2012, but growth remains sluggish and sensitive to volatile agricultural output. External imbalances are contained. The fiscal deficit declined between 2012–15, but the fiscal and external year-end objectives were missed in 2016. Following a protracted political transition, which led to a delay in the completion of this review, the new government has now confirmed its commitment to resume fiscal adjustment and meet key program objectives, including bringing public debt to about 60 percent of GDP by 2020. The outlook is subject to elevated risks, including fragile recovery in the euro area and geopolitical risks in the region. On the domestic side, reducing unemployment rates, and achieving higher and more inclusive growth remain key challenges.