Casablanca – Morocco’s central bank has opted to maintain its benchmark interest rate at 2.25%, reflecting a cautious approach in the face of growing international uncertainty linked to the ongoing conflict in the Middle East. While domestic economic indicators point to resilience and recovery, authorities remain vigilant about external risks, particularly those stemming from energy markets and global financial conditions.

Following its first quarterly meeting of 2026, Bank Al-Maghrib emphasized that the geopolitical situation—especially the escalation involving Iran—introduces significant uncertainty into the global economic outlook. The institution warned that the conflict will have consequences for Morocco, mainly through rising energy prices and their impact on external balances.

Energy prices at the core of risks

The central bank identified energy prices as the primary transmission channel of external shocks to the Moroccan economy. As a net importer of energy, Morocco remains highly sensitive to fluctuations in global oil markets.

Current projections highlight a wide range of possible oil price scenarios, with estimates varying between $80 and $140 per barrel depending on the evolution of the conflict. This volatility complicates economic forecasting and raises concerns about the country’s energy import bill, which is expected to increase significantly in 2026 before easing in the following year.

A sustained rise in oil prices would not only increase import costs but could also feed into domestic inflation and widen the current account deficit. In this context, the central bank noted that the deficit could increase from 2.3% of GDP in 2025 to around 3.1% in 2026.

Inflation remains contained, but uncertainty persists

Despite external pressures, inflation in Morocco has remained at relatively low levels in recent months. This trend has been supported by improved supply conditions for certain food products and a temporary decline in fuel prices.

Bank Al-Maghrib expects inflation to remain broadly stable at around 0.8% in 2026 before gradually rising to 1.4% in 2027. This moderate outlook assumes that global energy prices do not experience a prolonged surge.

However, the central bank cautions that this scenario remains subject to considerable uncertainty. Any sustained increase in oil prices could translate into higher transport and production costs, eventually impacting consumer prices.

Monetary policy: a flexible and data-driven approach

In light of these uncertainties, Bank Al-Maghrib has chosen to keep its monetary policy unchanged, maintaining the key interest rate at 2.25% for the fourth consecutive time. This decision aligns with market expectations and reflects a strategy aimed at preserving flexibility.

The central bank indicated that its policy stance is based on several factors, including the continued momentum of economic activity, moderate inflation levels, and the elevated degree of uncertainty at the global level. It also highlighted the role of stress tests in assessing the resilience of the national economy.

Authorities signaled that future decisions will be taken on a meeting-by-meeting basis, depending on the latest available data. The possibility of extraordinary meetings has not been ruled out should conditions change rapidly.

Economic growth supported by agriculture and investment

On the domestic front, Morocco’s economic outlook remains positive. Growth is expected to accelerate to 5.6% in 2026, compared to an estimated 4.8% in 2025, before slowing to 3.5% in 2027.

This performance is driven by two key factors. First, the agricultural sector is set to rebound strongly following favorable weather conditions. The cereal harvest is projected to reach approximately 82 million quintals, based on a cultivated area of 3.9 million hectares. As a result, agricultural value added is expected to increase by 14.4% in 2026.

Second, non-agricultural sectors continue to demonstrate resilience, supported by sustained investment in infrastructure and steady growth in industrial activity. These sectors are expected to expand at a rate of around 4.5%, contributing to overall economic stability.

External and fiscal balances under watch

While growth prospects are encouraging, external balances remain a key area of concern. Rising energy import costs are expected to put pressure on the current account, even as exports, tourism revenues, and remittances provide important support.

Morocco’s foreign exchange reserves are projected to strengthen in the medium term, helping to maintain adequate import coverage and enhance the country’s ability to absorb external shocks.

On the fiscal side, public finances are expected to improve gradually. The budget deficit is projected to decline to around 3.5% of GDP in 2026, supported by stronger public revenues and efforts to control spending. However, authorities may face difficult choices if energy prices rise sharply, particularly regarding whether to pass higher costs on to consumers or absorb them through public support measures.

Resilience amid global uncertainty

Officials, including central bank governor Abdellatif Jouahri, have expressed confidence in the overall resilience of Morocco’s economy. This confidence is underpinned by solid macroeconomic fundamentals, prudent monetary policy, and improved crisis management experience gained over recent years.

At the same time, policymakers acknowledge that Morocco remains exposed to external shocks as an open economy. To mitigate potential risks, the country continues to rely on precautionary tools such as its flexible credit line with the International Monetary Fund, which provides an additional buffer in case of severe disruptions.

As global uncertainty persists, Bank Al-Maghrib has reaffirmed its commitment to closely monitoring developments and adapting its policies accordingly. The coming months will be critical in determining whether the current balance between economic recovery and external risk can be sustained.