Morocco's Central Bank Maintains Key Interest Rate Amid Varied Economic Outlook

Ekhbary News Agency | May 15, 2024

Morocco's Central Bank confirmed its decision to keep the benchmark interest rate at 2.25% following its recent quarterly session. This announcement came alongside detailed economic projections for the years 2026 and 2027, outlining a complex trajectory for the national economy.

Growth and Inflation Projections

The bank anticipates average inflation to reach 1.5 percent in 2026, subsequently rising to 2.1 percent in 2027, a shift from the approximate 0.8 percent maintained over the past two years. Economic growth is expected to accelerate significantly to 5.2 percent this year, up from 4.9 percent in 2025. This boost, for what it's worth, is primarily attributed to a rebound in agricultural output following heavy rainfall that ended a seven-year drought. However, growth is projected to slow to 3.1 percent in 2027, assuming an average harvest season.

Economic Challenges and Balance of Payments

The Central Bank forecasts a widening of Morocco's current account deficit to four percent of GDP in 2026, compared to 2.4 percent in the previous year. This expansion is mainly driven by increased energy imports, with the energy import bill expected to surge by 26 percent to 135 billion dirhams ($14 billion) this year, before declining to 114.4 billion in 2027, partially due to the Middle East conflict. This move by the central bank appears to balance supporting economic expansion with containing potential inflationary pressures. Conversely, the bank expects increases in phosphate and fertilizer exports, expatriate remittances, tourism revenues, and foreign direct investment. These factors are anticipated to bolster foreign exchange reserves, reaching 542 billion dirhams ($57 billion) by 2027, covering slightly over six months of imports.