The Bank Al-Maghrib (BAM), Morocco's central bank, has decided to maintain its key interest rate unchanged at 2.25%, as widely expected by institutional investors. This decision was made during the bank's quarterly meeting held on September 22 in Rabat. The bank's council considered factors such as the strong uncertainty surrounding economic prospects, moderate inflation rates, and the expected consolidation of non-agricultural economic activity.
The council analyzed the current economic situation, recent developments on national and international levels, and medium-term macroeconomic projections. These projections indicate that the global economy remains relatively resilient, driven by investments in artificial intelligence and increased public spending, particularly in defense. However, the council noted the escalation of conflicts in the Middle East and Ukraine, which are exacerbating supply chain disruptions, particularly for energy and food products.
The BAM council also observed that inflation in Morocco has remained low, averaging 0.3% over the first eight months of the year. The bank forecasts that inflation will reach 0.7% for 2026 and 1.5% in 2027. The core inflation rate is expected to accelerate from -0.2% this year to 2.2% in 2027, reflecting the dissipation of the impact of the contraction in food prices and persistent imported inflation.
The council noted that the Moroccan economy is expected to slow down from 4.9% in 2025 to 4.4% in 2026 and 2.9% in 2027. The agricultural sector is expected to rebound by 16% this year, driven by an estimated cereal harvest of 93 million quintals, but will decline by 7.6% in 2027. Non-agricultural activities are expected to decelerate from 4.5% in 2025 to 3.1% in 2026 before recovering to 4% in 2027.
The current account deficit is expected to widen due to a 28.4% increase in the energy bill, which is projected to reach 138.1 billion dirhams (MMDH) in 2026. However, the deficit is expected to narrow to 116 MMDH in 2027. The exports of the automotive sector are expected to recover gradually, reaching 202.2 MMDH in 2027, while phosphate and derivative sales are expected to increase by 9.7% this year and 12.1% in 2027.
The tourism sector is expected to continue its growth, with revenues reaching 160 MMDH in 2027. Remittances from Moroccan expatriates are also expected to increase, reaching 136.3 MMDH in 2027. Foreign direct investment (FDI) is projected to account for 3.5% of GDP. The official reserve assets are expected to increase to 502.8 MMDH by the end of 2026 and 515.3 MMDH by the end of 2027.
The central bank also noted that the credit growth to the non-financial sector is expected to accelerate from 4.8% in 2025 to 8.1% in 2026 and 6.1% in 2027. The budget deficit, excluding privatization proceeds, is expected to reach 3.4% of GDP in 2026 and 3.5% in 2027. The execution of the 2026 budget shows a 9.6% increase in ordinary revenues and a 10.5% increase in overall expenditures.
Key points
- The Bank Al-Maghrib maintains its interest rate at 2.25% amid economic uncertainty.
- Inflation is expected to reach 0.7% in 2026 and 1.5% in 2027.
- The Moroccan economy is expected to slow down to 4.4% in 2026 and 2.9% in 2027.
