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Mohammedia – Morocco’s public debt is declining – a sign of fiscal discipline on the part of the country’s government and tax revenue growth that has exceeded forecasts.
According to Les Inspirations Éco, Morocco has managed to reduce its debt-to-GDP ratio from 72.2% in 2020 to 67.7% by 2024, and is expected to fall slightly to 65.8% by 2026 – its lowest point in more than a decade.
This achieved improvement is concurrent with a continuous decline in the cost of debt repayment. According to estimates, interest payments are projected to be MAD 41.6 billion for the year 2025, contributing only 2.3% of GDP growth.
According to the Ministry of Finance, this progress is a result of adopting an “active debt management” strategy, meaning that debt will be managed by refocusing on refinancing risks, smoothing out repayment schedules, and minimizing borrowing costs through buybacks and bond exchanges.
Interestingly, this steady decrease in debt is reflected in the country’s fiscal revenues, as they have remained resilient over the last four years, such that the country has managed to reduce its deficit, from 7.1% of its GDP in 2021 to only 3.8% of its GDP in 2024, as indicated in the draft finance bill for 2026, which foresees a reduction of this deficit down to 3%.
Les Inspirations Éco points out that for each percentage point of deficit cut, Morocco becomes less dependent on borrowing, thereby improving its ability to finance its spending priorities through internal resources instead of resorting to external borrowing. Two forces now propel the Treasury: economic growth and spending discipline.
Morocco’s debt composition is also changing over time. External public debt stood at 468.2 billion dirhams as of end-2024, or around 29.3% of GDP, and is now increasingly composed of multilateral agencies (52.8%), bilateral agencies (19.9%), and international markets (27.3%).
Again, the World Bank is Morocco’s lead lender, accounting for 30.2% of its external debt, followed by the African Development Bank (16.2%), France (11.8%), and the European Investment Bank (10.2%).
Domestically, investment funds (OPCVMs) have surpassed banks as the major holders of Treasury bonds, accounting for 35.9% of all debt, followed by banks at 35.6%. Insurance companies now follow with a share of 13.8%, while pension funds and large firms trail close behind at about 14.7%.
The trend has certainly not passed unnoticed on the international scene. The recent upgrade of Morocco’s sovereign rating by S&P Global Ratings is only one indication of increased investor confidence in Morocco’s fiscal future.
As far as Les Inspirations Éco is concerned, this blend of responsible spending, revenue growth, and proactive debt management is putting Morocco on a path towards reclaiming its flexibility and securing financial stability in the future.
