A Paradoxical Position
The IMF considers Morocco's economic policies to be sound, granting it access to precautionary credit lines. However, this stability is deceptive. The country remains highly vulnerable to external shocks, a heavy debt service burden, and a systemic trap within the IMF's own rules that can create what our analysis calls "illegitimate debt."
Where Does the Money Go? (2023)
A staggering portion of Morocco's public debt service payments is directed to multilateral institutions, far exceeding the average for other lower-middle-income countries. This highlights a profound dependency on IFIs for managing its finances.
55.9%
of Public & Publicly Guaranteed Debt Service is paid to Multilateral Institutions.
Vulnerability to Energy Shocks
As an energy importer, Morocco is highly exposed to global price volatility. In 2022, the country's energy import bill nearly doubled, placing immense strain on its foreign currency reserves and public finances.
The "Illegitimate Debt" Trap
The IMF acknowledges Morocco is well-positioned to withstand a moderate external shock (like a global recession). However, the system creates a perverse incentive: facing a crisis through no fault of its own would force Morocco to access an IMF credit line, which—under current rules—would automatically trigger years of surcharge payments.
1. External Shock
(e.g. Global Recession)
2. Access IMF Credit
(For stabilization)
3. Surcharges Triggered
(Penalty for borrowing)
4. Illegitimate Debt
(Punished for a crisis)
This penalizes a country for its vulnerability, creating debt with no economic justification.
The Human Cost: Interest vs. Public Spending (2025 Proj.)
The cost of servicing public debt severely impacts the national budget. By 2025, interest payments are projected to consume a massive portion of government funds, dwarfing the amounts allocated to subsidies and social benefits combined.