Casablanca – Bank Al-Maghrib has maintained its key interest rate at 2.25%, extending the pause in monetary policy for a sixth consecutive meeting as Morocco enters the final months of 2026 with low inflation, stronger agricultural output and continued investment activity. The central bank’s latest projections point to economic growth of 4.4% this year, followed by a slowdown to 2.9% in 2027 as agricultural production is expected to normalize.

The decision, announced after the central bank’s third quarterly meeting of 2026, comes despite a sharp moderation in consumer-price growth. Inflation averaged just 0.3% during the first eight months of the year and is expected to reach 0.7% for the full year. It is then projected to increase to 1.5% in 2027 as food-price effects fade and underlying inflation becomes more pronounced.

The central bank’s decision reflects a combination of moderate medium-term inflation expectations and uncertainty surrounding the domestic and international economic environment. Rather than focusing only on current inflation, monetary policymakers are also assessing the expected direction of economic activity, imported price pressures, commodity markets and financial conditions.

Underlying inflation is projected to move from -0.2% in 2026 to 2.2% in 2027. The expected increase is linked partly to the fading impact of lower food prices, particularly olive oil, and the continued effect of imported inflation. Financial-sector experts surveyed during the third quarter expect average inflation of 2.1% over an eight-quarter horizon and 2.2% over 12 quarters.

The external environment remains a major consideration. Renewed geopolitical tensions in the Middle East and the continued Russia-Ukraine conflict have affected energy, food and other supply chains. Higher commodity prices and greater volatility could create new pressure on import costs, even as Morocco has benefited from measures that have limited the immediate transmission of international energy prices to domestic consumers.

Global economic activity is nevertheless expected to remain relatively resilient. Investment associated with artificial intelligence and increased public spending, particularly on defense and infrastructure, are providing support in several major economies. Global growth is projected at 3% in 2026, before slowing slightly to 2.9% in 2027.

For Morocco, the latest projections show a significant contribution from agriculture. Agricultural value added is expected to rise by 16% in 2026, supported by an estimated cereal harvest of 93 million quintals. This would represent a substantial improvement from the previous agricultural season and provide an important contribution to national growth.

The agricultural rebound is expected to be temporary, however. Bank Al-Maghrib projects agricultural value added to decline by 7.6% in 2027, based on an assumption of cereal production returning to an average level of around 50 million quintals. This expected swing explains much of the difference between the 4.4% growth forecast for 2026 and the 2.9% projection for 2027.

Non-agricultural activity is also expected to change pace. Growth in these sectors is projected to slow from 4.5% in 2025 to 3.1% in 2026, partly because mining and manufacturing activity has developed less strongly than previously anticipated. Growth is then forecast to recover to 4% in 2027.

The labor market has continued to show relatively strong employment gains. The economy created 406,000 jobs year-on-year during the second quarter of 2026, while the unemployment rate declined to 9.5%. The rate stood at 11.9% in urban areas and 5.4% in rural areas.

The combination of investment demand and higher import prices is expected to put additional pressure on Morocco’s external accounts. The energy import bill is forecast to increase by 28.4% in 2026 to about $14.2 billion, before falling to roughly $12 billion in 2027 as energy prices are expected to moderate.

Imports of raw materials are projected to rise by 53.4% this year and another 8.3% next year. Capital-goods imports are expected to increase by 15.6% in 2026 and 8.8% in 2027, reaching about $25.8 billion next year. The increase reflects continued investment and demand for machinery and equipment.

Export performance is expected to provide some compensation. Automotive exports are projected to resume gradual growth after remaining nearly stable in 2025, reaching approximately $20.8 billion in 2027. Phosphate and derivative exports are expected to increase by 9.7% in 2026 and by 12.1% in 2027, reaching around $12.6 billion.

Tourism and remittances are also expected to remain important sources of foreign currency. Travel receipts are projected to reach approximately $16.5 billion in 2027, while transfers from Moroccans living abroad are expected to reach about $14.1 billion.

Despite these inflows, the current-account deficit is forecast to widen considerably in 2026. After standing at 2.4% of GDP in 2025, it is expected to reach 4.6% this year before narrowing to 3% in 2027. The deterioration reflects stronger import demand, particularly for energy, raw materials and capital goods.

Foreign direct investment inflows are projected to remain equivalent to around 3.5% of GDP annually. Official reserve assets are expected to reach approximately $51.8 billion by the end of 2026 and $53 billion by the end of 2027, providing coverage equivalent to around five and a half months of imports of goods and services.

Bank lending is also expected to accelerate. Credit to the non-financial sector is projected to increase by 8.1% in 2026, compared with 4.8% in 2025, before slowing to 6.1% in 2027. At the same time, the banking system’s liquidity requirement is expected to continue increasing and reach approximately $17.3 billion in 2027.

Currency conditions are expected to adjust as well. After an appreciation of 2% in 2025, the dirham’s real effective exchange rate is projected to decline by 4.1% in 2026 and another 2% in 2027. Bank Al-Maghrib’s assessments indicate that the exchange rate remains broadly consistent with economic fundamentals.

Public finances are facing a different set of pressures. During the first eight months of 2026, ordinary government revenues increased by 9.6%, while total expenditure rose by 10.5%. Higher spending was linked mainly to goods and services as well as debt-interest payments.

The government also approved additional budget credits equivalent to about $2.1 billion in May. Taking into account budget execution, the 2026 Finance Law, the three-year budget framework and initial assumptions for the 2027 budget, Bank Al-Maghrib projects a fiscal deficit, excluding proceeds from state-asset sales, of 3.4% of GDP in 2026 and 3.5% in 2027.

Commodity markets remain an important source of uncertainty for the projections. Brent crude is expected to average about $87.2 per barrel in 2026, compared with $68.2 in 2025, before declining to around $73.5 in 2027. Moroccan phosphate rock prices are projected at approximately $860 per ton this year, compared with $713 in 2025, before easing to about $803 in 2027. The FAO food price index is expected to increase by 2.3% in 2026 and another 2.4% in 2027.

These developments leave Bank Al-Maghrib balancing low current inflation against the possibility of renewed external price pressures and a changing domestic growth profile. The central bank has indicated that future monetary-policy decisions will continue to be made meeting by meeting, based on the latest developments in prices, economic activity, financial conditions and the international environment.