Morocco’s central Bank has decided to lower its key rate by 25 basis points to 2.75 percent and expects the country’s economic growth to reach 2.8 % in 2024 before rebounding to 4.5 % in 2025.
The Bank’s economic forecast and decision regarding the country’s monetary policy were made during the meeting held Tuesday by its Board which analyzed the national and international economic developments, as well as the medium-term macroeconomic projections of Bank Al-Maghrib.
Morocco’s economic growth accelerated from 1.5 % in 2022 to 3.4 % in 2023, as a result of a 3.5 % improvement, after 3.4 %, in non-agricultural value added, as well as a slight recovery by 1.4 %, after a contraction of 11.3 % in agricultural value added.
In the medium term, non-agricultural activities are expected to strengthen at rates of 3.8 % in 2024 and 4.1 % in 2025, thanks to the various projects launched and scheduled, the continued momentum of tourism-related activities, and the consolidation of household consumption in line with inflation slowdown and wage increases, say the experts of the Bank.
However, agricultural production would remain dependent on climate conditions. Thus, considering a cereal crop estimated by the Department of Agriculture at 31.2 million quintals, agricultural value added would fall by 6.9 percent this year, before rebounding by 8.6 percent in 2025, assuming a return to an average cereal harvest of 55 million quintals.
According to Bank Al Maghrib projections, Morocco’s national economic growth would return to 2.8 % in 2024, before accelerating to 4.5 % in 2025.
After reaching 6.6 % in 2022 and 6.1 % in 2023, domestic inflation returned to low levels in recent months, mainly driven by easing external pressures and lower prices of volatile food products.
With the resumption of the process of subsidies removal, inflation should end the current year with an average of 1.5 %, before rising to 2.7 % in 2025, say Morocco’s central bank.
the Bank, which kept its key rate unchanged for four consecutive meetings, decided to lower it by 25 basis points to 2.75 %. The move comes after having calibrated its tightening of monetary policy. The measures taken by the Government in support of household purchasing power and some economic activities helped to ensure price stability and steer inflation back to post-covid recovery levels.