In Rabat, Morocco’s central bank, Bank Al-Maghrib, took a cautious yet deliberate step at its September 2025 meeting, opting to keep its benchmark interest rate unchanged at 2.25 percent. The decision reflects a careful calibration between external turbulence, ranging from United States trade policy shifts to enduring conflicts in the Middle East and Ukraine and Morocco’s own domestic priorities, including water stress, fiscal pressures, and the trajectory of agricultural output.
Inflation in Morocco has remained muted compared with global peers. Over the first eight months of 2025, consumer prices rose by an average of 1.1 percent. Bank Al-Maghrib now projects full-year inflation at 1 percent, broadly steady with 2024, before edging up to 1.9 percent in 2026. Core inflation, which strips out volatile food and energy prices, is set to decline sharply from 2.2 percent in 2024 to 1.1 percent this year, before climbing back to 2 percent by 2026.
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Market expectations remain anchored. Financial experts anticipate average inflation of 2.1 percent over the next two years and 2.2 percent over the next three, reflecting confidence in the central bank’s credibility and in Morocco’s relatively stable price dynamics.
Morocco’s growth path is tied closely to weather conditions and sectoral momentum. Following a 3.8 percent expansion in 2024, output is projected to accelerate to 4.6 percent this year before easing slightly to 4.4 percent in 2026. Agriculture plays a pivotal role: the 2025 cereal harvest is estimated at 41.3 million quintals, and forecasts for 2026 assume a recovery to 50 million. Agricultural value added is expected to rise by 5 percent this year and by 3.2 percent in 2026.
Outside the fields, non-agricultural sectors remain buoyant. Backed by large-scale infrastructure projects and robust investment, growth in these industries is forecast to stabilise around 4.5 percent in both 2025 and 2026, underscoring Morocco’s structural diversification away from heavy reliance on rain-fed crops.
Trade Winds and Global Tides
The balance of Morocco’s external accounts mirrors both global volatility and domestic competitiveness. Exports are projected to grow by 6.2 percent in 2025, driven by strong phosphate sales reaching MAD 110.7 billion, before rising by 9.4 percent in 2026, fuelled by a resurgence in automotive exports expected to climb 20 percent to MAD 187.6 billion. Imports, too, are set to rise by 7.4 percent in 2025 and 7.1 percent in 2026 largely due to increased capital goods purchases. Yet Morocco’s energy bill is projected to fall to MAD 94.4 billion by 2026, easing pressure on the current account.
Other vital inflows remain resilient. Travel receipts are expected to climb to MAD 131.2 billion in 2026, remittances to MAD 125.5 billion, while foreign direct investment is forecast at 3.5 percent of GDP. Collectively, these dynamics are expected to trim the current account deficit from 2.3 percent of GDP in 2025 to 2 percent in 2026. Meanwhile, foreign exchange reserves are projected to rise to MAD 434.5 billion ($48 billion) by the end of 2026, enough to cover five and a half months of imports.
Fiscal management is another arena where Morocco is seeking balance. Ordinary revenues grew by 14.5 percent in the first eight months of 2025, largely due to stronger tax performance. Yet expenditure also expanded by 12.6 percent, driven by both operational and capital spending. Bank Al-Maghrib expects the fiscal deficit to remain steady at 3.9 percent of GDP this year before narrowing to 3.4 percent in 2026. The tightening reflects enhanced tax mobilisation offsetting heavier investment outlays, particularly in infrastructure and public projects
Morocco’s policy stance cannot be understood in isolation. Global growth is projected to slow slightly, from 3.3 percent in 2024 to 3.2 percent in 2025, before easing further to 2.9 percent in 2026. The euro area is expected to edge up from 0.9 percent growth in 2024 to 1.3 percent in the next two years, while the United States faces a slowdown to 1.7 percent in 2025 and 1.6 percent in 2026. China remains on track for its 5 percent growth target this year, though momentum could taper to 4.2 percent by 2026. India stands out with robust growth of 7.1 percent in 2025, underpinned by a trade agreement with the United Kingdom, before moderating to 6.2 percent in 2026.
Commodity prices, too, shape Morocco’s external position. Brent crude is forecast to average $68.5 per barrel in 2025, sliding further to $65.2 in 2026. Moroccan raw phosphate prices are expected to decline, but phosphate derivatives such as DAP and TSP are projected to rise, supported by supply constraints in China. These shifts underscore Morocco’s exposure to international markets but also highlight its strength in sectors where global demand is expanding.
Reading Between the Lines
By holding its benchmark rate unchanged, Bank Al-Maghrib has signalled continuity rather than disruption, emphasising stability amid uncertainty. The central bank is positioning itself as both guardian of price stability and enabler of growth, particularly by supporting credit flows to businesses, including very small enterprises. Lending to the non-financial sector is forecast to expand by nearly 6 percent annually in 2025 and 2026, a notable acceleration compared with the 2.7 percent average of the past two years.
This balancing act, between safeguarding reserves, narrowing deficits, and stimulating private credit, points to a strategy of cautious optimism. Morocco is neither loosening recklessly nor tightening prematurely; instead, it is navigating a middle course shaped by domestic realities and global headwinds.
In a climate of persistent uncertainty, Morocco’s decision to hold its interest rate at 2.25 percent is more than a monetary technicality. It is a statement of measured resilience, reflecting a country intent on strengthening its economic base, investing in its future, and managing external vulnerabilities with discipline. By 2026, Morocco is set to enter calmer waters, with higher reserves, narrowing deficits, and steady growth, provided the global seas do not turn too turbulent.
