Bank Al-Maghrib’s Council, meeting in Rabat on Tuesday, decided to hold its key policy rate unchanged at 2.25 percent. The central bank cited inflation expected to remain consistent with its medium-term price stability objective, continued economic growth momentum and substantial uncertainty in the international environment as the factors informing the decision. The Council will continue to set its rate meeting by meeting on the basis of the most up-to-date available data.
The Middle East conflict has made its presence felt on Morocco’s energy costs, with fuel prices rising 27.6 percent year-on-year in May. Despite this, BAM projects headline inflation accelerating only moderately, from the 0.8 percent average of the previous two years to 1.5 percent in 2026 and 2.1 percent in 2027. Core inflation is expected to remain limited to 0.2 percent this year — held down by a contraction in olive oil prices — before climbing to 2.9 percent in 2027 as imported inflation feeds through more broadly. Financial sector experts surveyed by BAM expect an average inflation rate of 2.2 percent at both the eight- and twelve-quarter horizons.
Growth prospects are stronger. GDP expansion is projected to accelerate from 4.9 percent in 2025 to 5.2 percent this year, before easing to 3.1 percent in 2027 on a base effect. Agricultural value added is set to surge 16 percent, driven by a bumper cereal harvest estimated at 90 million quintals by the Agriculture Department, while non-agricultural activity is expected to sustain growth of 4.2 percent.
External accounts face mounting pressure. The energy bill is forecast to swell 26 percent to 135 billion dirhams in 2026, widening the current account deficit from 2.4 percent of GDP in 2025 to 4 percent this year. Partial offsets come from tourism receipts projected to reach 161.1 billion dirhams by 2027 and MRE remittances approaching 130 billion dirhams. Official reserves are projected at 542 billion dirhams in 2027, equivalent to six months and nine days of imports.
On the monetary and fiscal fronts, bank credit to the non-financial sector is projected to accelerate from 4.8 percent growth in 2025 to 6.8 percent this year, while the dirham remains broadly aligned with economic fundamentals. The first five months of budget execution show ordinary revenues up 8 percent and total expenditure rising 12.2 percent, with the government having opened 20 billion dirhams in supplementary credits. BAM projects the budget deficit narrowing to 3.4 percent of GDP in 2026 and 3.3 percent in 2027.