Morocco's Economic Outlook and Interest Rate Decision
In a recent announcement, Morocco's central bank, Bank Al-Maghrib (BAM), has decided to keep its benchmark interest rate unchanged at 2.25%. This decision comes after a thorough assessment during its Board meeting, which reflects the current global economic climate characterized by significant uncertainty. Various factors contributing to this uncertainty include geopolitical tensions in the Middle East, the ongoing war in Ukraine, and shifts in U.S. trade policy. BAM has acknowledged that these global dynamics are exerting increasing pressure on the resilience of the global economy, with noticeable effects already being felt in financial markets and commodity prices, particularly energy.
BAM indicated that while the impact of these geopolitical tensions on Morocco's domestic economy is expected to be manageable in the event of a brief conflict, the situation could worsen if hostilities extend over a longer period. The primary channel through which these international tensions might affect Morocco is the volatility in external accounts, especially concerning energy prices. In light of this, the central bank emphasized its commitment to closely monitoring international developments and their potential implications for the Moroccan economy.
Positive Domestic Economic Indicators
On the domestic side, the economic outlook appears largely positive. The BAM has highlighted the resilience and growth of non-agricultural sectors, which are buoyed by strong investment activity aimed at enhancing economic and social infrastructure. Furthermore, the agricultural sector is projected to experience a notable recovery, driven by exceptionally favorable weather conditions. For the current season, the cereal harvest is estimated to reach an impressive 82 million quintals, with cultivation taking place over 3.9 million hectares.
In terms of national economic growth, projections indicate an anticipated increase to 4.8% in 2025, with an impressive growth rate of 5.6% forecasted for 2026, before moderating to 3.5% in 2027. Agricultural value addition is expected to surge by 14.4% in 2026, rebounding from several years of drought challenges, although it may contract by 5.3% the following year under the assumption of an average cereal harvest. Meanwhile, non-agricultural sectors are expected to sustain a steady growth rate of approximately 4.5%.
Regarding inflation, current levels remain low, supported by an improved food supply and declining fuel prices. It is projected to remain moderate in the medium term, with estimates of 0.8% for 2026 and 1.4% for 2027, despite an expected increase in oil prices under the central scenario. In this context, BAM has determined that existing monetary conditions are appropriate and has signaled its intention to adjust its policy in accordance with the latest economic data at future meetings.
As reported by apanews.net.
