Morocco’s Central Bank has decided to keep the key rate unchanged at 2.25 pc as inflation is expected to remain moderate at 1.5 % in 2026, while the country’s growth is projected to increase from 4.9 % in 2025 to 5.2 % in 2026, before slowing to 3.1 % in 2027.
These projections were made Tuesday by the Bank’s Board after having assessed developments in the international environment, marked by the implications of the conflict in the Middle East, which has significantly disrupted supply chains, intensified inflationary pressures and heightened uncertainties surrounding the global economic outlook.
The recent conclusion of a memorandum of understanding between the United States and Iran suggests a gradual normalization of maritime transport. However, economic activity is expected to continue to be adversely affected by the conflict fallout in the short term.
Domestically, the repercussions of this conflict are notably reflected in the energy bill and fuel prices which recorded a year-on-year increase of 27.6 % in May. This increase, together with the overall rise in imported inflation, is expected to lead to a clear acceleration of domestic inflation, which, however, would remain moderate over the medium term.
Thus, after averaging around 0.8 percent over the previous two years, inflation is projected to reach 1.5 % on average this year and 2.1 % in 2027, according to Bank Al-Maghrib’s updated forecasts.
For its part, core inflation is expected to be limited to 0.2 % in 2026, mainly reflecting a decline in the prices of its food component, particularly olive oil.
Regarding economic activity, annual national accounts data for 2025 indicate a growth improvement, driven by a marked increase in agricultural production and by a consolidation in the pace of non-agricultural activities. This momentum is expected to continue this year, supported by very favorable weather conditions and by the continued strengthening of nonagricultural activities, albeit at a slower pace than previously anticipated.
In view of the projected path of inflation toward levels consistent with the price stability objective over the medium term combined with the consolidation of the pace of economic activity and the high level of uncertainty surrounding the global economic outlook, Bank Al Maghrib decided keep the key rate unchanged but will continue to closely monitor domestic and international developments.
The Bank also expects the country’s agricultural value added to increase by 16 % in 2026, following a rise of 8.2 % in 2025, reflecting a cereal harvest estimated by the Department of Agriculture at 90 million quintals. It would then contract by 7.6 % in 2027, assuming a return to average cereal output.
Non-agricultural growth would hover around 4.2 % on average in 2026– 2027, after 4.5 % in 2025. For these reasons, Bank Al-Maghrib’s anticipates the Kingdom’s economic growth to reach 5.2 % 2026 and 3.1 % in 2027.
