Morocco’s central bank (Bank Al-Maghrib) has reduced its key rate by 25 basis points to 2.5 per cent, following its fourth quarterly meeting on Tuesday. This decision reflects inflation aligning with price stability targets amid ongoing global uncertainties, particularly geopolitical tensions and shifts in US policy, according to the central bank’s monetary statement.
The board’s projections show Morocco’s domestic inflation ending 2024 at 1 per cent, with moderate increases expected in 2025 and 2026. Non-agricultural growth in Morocco is forecasted at 3.5 per cent in 2024, with stronger performance anticipated in the following years, while agricultural production remains vulnerable to unpredictable weather conditions.
Morocco’s export sectors are poised for growth, with goods exports expected to rise from 5.5 per cent in 2024 to 8.9 per cent by 2026. Automotive sales are projected to reach MAD 200 billion in 2026, while phosphate and derivatives sales are forecast to hit MAD 100 billion in the same year.
Foreign trade is expected to improve, with imports rebounding from a 2.9 per cent decline in 2023 to 4.6 per cent in 2024, and continuing to rise by 7.9 per cent in 2025 and 6 per cent in 2026, driven by capital goods purchases linked to infrastructure projects.
The current account deficit is expected to remain contained at around 1 per cent of GDP in 2024, staying below 2 per cent of GDP in the following two years. Foreign direct investment receipts are anticipated to rise from 2.7 per cent of GDP in 2024 to 3.3 per cent in 2026.
Remittances are projected to increase by 4.3 per cent by the end of 2024, with annual growth between 3 per cent and 3.5 per cent, reaching MAD 128 billion by 2026. Travel receipts are expected to grow by 9.1 per cent in 2024 and continue to rise, reaching MAD 128 billion by 2026.
Bank Al-Maghrib’s liquidity forecast indicates rising bank liquidity needs, with credit to the non-financial sector expected to grow gradually. Public finances show improved tax revenues, and the fiscal deficit is forecast to narrow from 4.5 per cent of GDP in 2024 to 4.2 per cent in 2025, and 3.9 per cent in 2026. The Board also approved the Bank’s 2025 budget and set meeting dates for the coming year.
Attribution: BANK AL-MAGHRIB BOARD MEETING
Subediting: M. S. Salama