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Mohammedia – The year 2024 marked a critical turning point for global debt dynamics, according to the International Debt Report 2025, as low- and middle-income countries (LMICs) entered a phase of slower borrowing but far heavier repayment burdens.
Total external debt growth across these economies slowed sharply to just 1.1%, reaching a record $8.9 trillion.
Yet, despite this pause in accumulation, interest payments surged to an all-time high of $415.4 billion, revealing that the true strain in 2024 lay not in new loans, but in the rising cost of servicing old ones.
Morocco fits squarely within this global pattern. While its total external debt stock edged slightly lower between 2023 and 2024, the country still faced growing pressure from debt service, especially on the public side.
In absolute terms, Morocco’s external debt stood at $67.99 billion in 2024, down from $69.63 billion in 2023, marking its second-highest level on record.
This mirrors a broader shift identified by the World Bank, where governments — rather than private firms — have become the dominant external borrowers in the post-pandemic era.
Across LMICs, the structure of debt has changed profoundly over the past decade. By 2024, nearly 60% of long-term external debt was public and publicly guaranteed, reflecting how states stepped in to sustain growth after COVID-19.
Morocco follows this trend closely, with public-sector borrowing accounting for $45.72 billion of its $57.20 billion in long-term external debt in 2024, while private nonguaranteed debt stood at $11.47 billion.
At the same time, conditions on global financial markets remain tight. Although bond markets partially reopened in 2024 and investor appetite returned, borrowing costs stayed elevated.
Many countries issued new bonds to refinance maturing debt or cover budget deficits — but often at interest rates hovering around 10%, roughly double pre-2020 levels. This renewed access helped ease immediate liquidity pressures, yet it also locked in higher long-term debt-service obligations.
Morocco’s debt strategy reflects a global shift toward risk management
One of the defining adjustments of 2024 was a widespread move away from short-term external borrowing toward longer maturities and domestic financing.
The International Debt Report highlights that more than half of the countries with available data saw domestic government debt grow faster than external debt. This shift was driven by a desire to reduce rollover risks and exposure to volatile global interest rates.
Morocco followed this same risk-management logic. Its short-term external debt fell sharply from $10.16 billion in 2023 to $7.50 billion in 2024, while long-term public debt continued to rise.
At the same time, the country contracted $8.61 billion in new long-term external disbursements in 2024, up from $6.43 billion in 2023, with the public sector accounting for $6.86 billion of that total. This repositioning helped contain immediate external vulnerability even as global financial conditions remained uncertain.
Still, the cost of this stability is rising. Morocco’s interest payments on long-term debt climbed to $1.79 billion in 2024, while principal repayments reached $5.22 billion.
In total, debt service on long-term external debt amounted to a record $7.02 billion in a single year.
The International Debt Report warns that for many countries, these higher payments are crowding out critical spending on health, education, and social protection — a risk that applies just as much to middle-income economies as to poorer states.
On sustainability indicators, Morocco retains a relatively solid external position by regional standards. In 2024, debt service absorbed 13% of export revenues, while external debt represented about 44.7% of gross national income.
Foreign reserves, meanwhile, covered more than 54% of the total external debt stock. But the broader global message is clear: slower borrowing has not translated into lighter financial pressure.
As 2025 unfolds, Morocco, like many of its peers, faces a delicate balancing act — maintaining access to international financing, protecting foreign reserves, and absorbing higher interest costs without undermining growth.
Read also: Beyond GDP: How the World Bank’s Outlook Neglects the Real Story
