Morocco’s financial system has shown remarkable resilience in the face of challenging economic conditions, according to the 11th edition of the annual Financial Stability Report jointly published by Bank Al-Maghrib, the Insurance and Social Security Supervisory Authority, and the Capital Markets Authority.
The report emphasized that the Moroccan economy continued to demonstrate its robustness and adaptability throughout 2023, building on the resilience established since the COVID-19 pandemic.
The banking sector played a pivotal role in this resilience, bolstering its financial position through increased profitability and maintaining comfortable levels of capital.
The sector’s performance was driven primarily by market activities, with profits surging by 158% compared to a 51.6% contraction in the previous year.
As the cornerstone of the Moroccan financial system, the banking sector holds approximately 61% of total assets, while the non-life insurance segment experienced growth of 5.8%, the life insurance segment saw a slowdown to 1.8%.
The report also highlighted that the financial situation of Morocco’s primary pension and retirement systems remains challenging. The implementation of recent wage increase decisions will temporarily delay the depletion of reserves but will not guarantee long-term sustainability.
Household debt in Morocco has stabilized at around 28% of GDP, reflecting a recovery in consumer loans and a slowdown in housing loans. However, the non-performing loan ratio for households increased to 10.2%.
Corporate debt also slowed down significantly in 2023, with the debt-to-GDP ratio declining to 62% from 68% in the previous year.
On the macroeconomic front, Morocco has seen a reduction in its current account deficit and a continued improvement in the budget deficit. The central bank expects the budget deficit to stabilize in 2024 before declining further in 2025.
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