Morocco’s bond market maintained a steady recovery in the third quarter of 2025, supported by low inflation, ample liquidity, and strategic debt management, according to a report by Attijari Global Research (AGR).
Inflation averaged just 1 percent over the first nine months of 2025, allowing the central bank, Bank Al-Maghrib (BAM), to keep annual forecasts unchanged. The controlled price environment has strengthened investor confidence, enabling the government to finance its operations efficiently through domestic debt issuance.
“Stable prices and abundant liquidity are key to maintaining healthy market conditions,” AGR said, noting that daily money market investments averaged MAD 15 billion (US$1.64 billion), providing the treasury with flexibility and resilience.
Morocco’s public finances present a mixed picture. By September 2025, the ordinary balance – which reflects recurring revenues and expenditures such as salaries and basic services – stood at MAD 29 billion (US$3.16 billion), signalling fiscal stability in day-to-day operations.
However, the overall budget deficit widened to MAD 52.8 billion (US$5.76 billion), up from MAD 35.6 billion (US$3.88 billion) a year earlier. AGR attributed the increase to spending growth outpacing revenue, despite robust tax collection and a reduction in subsidies for essential goods, which partially offset the expenditure surge.
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Despite the higher deficit, Morocco has already covered nearly 93% of its projected 2025 financing needs, amounting to MAD 71.7 billion (US$7.82 billion) of the MAD 77.1 billion (US$8.41 billion) required. External borrowing remains a key part of the strategy, providing additional flexibility for the Treasury.
The government has also adjusted its bond issuance strategy, gradually focusing on medium-term maturities. AGR said this approach helps extend the average portfolio duration and smooth repayment schedules following the record maturities observed in 2023.
Market participants view these measures as stabilizing forces for the Moroccan bond market. Low inflation, high liquidity, and strategic debt management have together enhanced market resilience, ensuring investors remain confident in government securities.
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The combination of favorable macroeconomic conditions and careful fiscal planning has allowed Morocco to maintain a reliable financing framework while minimizing pressure on domestic liquidity. Treasury operations continue to benefit from investor demand, which has remained strong even amid a wider deficit.
Analysts said the Moroccan experience highlights the importance of coordinated monetary and fiscal policies in maintaining stable bond markets. By keeping inflation under control, extending debt maturities, and ensuring adequate liquidity, Morocco has been able to safeguard market confidence and limit borrowing costs.
AGR noted that while spending pressures remain, particularly from investment projects and infrastructure commitments, the Treasury’s ability to cover nearly all financing needs underscores the robustness of the strategy.
“Controlled inflation and ample liquidity have created favorable conditions for the government to meet its financing requirements without disrupting the market,” AGR concluded.
The Moroccan bond market’s stability contrasts with regional peers facing tighter financing conditions, underlining the value of disciplined monetary policy and strategic debt management in emerging markets.
