Bank Al-Maghrib: The Board pulls out the monetary easing card
Further easing of monetary policy. At its meeting on Tuesday, December 17, the Board of the Central Bank of Morocco (Bank Al-Maghrib, BAM) decided to lower the key interest rate by 25 basis points to 2.50%. This move is designed to support growth while preserving price stability, an objective at the heart of the central bank’s priorities.
By reducing the key rate to this level, BAM is responding to the market’s growing need for liquidity and seeking to create an environment conducive to productive investment and economic recovery.
This easing is based on forecasts of moderate inflation. After peaking at 6.1% in 2023, inflation is expected to ease to around 1% in 2024, helped by falling commodity prices and easing pressure on food products. The underlying component of inflation, reflecting fundamental price trends, is also following this trajectory, falling from 5.6% in 2023 to 2.1% this year. In the medium term, BAM anticipates lasting stability, with projections of 2.4% in 2025 and 1.8% in 2026.
This outlook, supported by stable expectations, is reinforced by the estimates of financial experts, who are forecasting an average of between 2.3% and 2.4% for 8 to 12 quarters ahead. For Bank Al-Maghrib, this trajectory confirms the gradual convergence of inflation towards levels in line with the price stability objective.
However, the central bank remains cautious in the face of numerous challenges. Among these, economic uncertainties linked to weather conditions are weighing heavily on agricultural production. BAM forecasts a 4.6% decline in agricultural value added in 2024, followed by a moderate recovery to 5.7% in 2025, based on cereal harvests of around 50 million quintals, in line with the average of the last five years. Agricultural value added is expected to grow by 3.6% in 2026.
At the same time, non-agricultural activities should remain stable, with 3.5% growth in 2024 and a slight acceleration to 3.9% in 2026, after 3.6% in 2025. As a result, overall growth in the national economy should be limited to 2.6% in 2024, before gradually accelerating to 3.9% by 2026.
Against this backdrop, BAM is keeping a close eye on the external uncertainties that continue to weaken the global economy.
Khadija MASMOUDI
