The headquarters of Bank Al-Maghrib in Rabat, Morocco, where the central bank held its third quarterly monetary policy meeting of 2026. Photo: Asharq Al-Awsat

NNA News - Morocco’s central bank has kept its benchmark interest rate at 2.25 percent, while cutting its forecast for economic growth this year and sharply lowering its inflation projection amid continued uncertainty over the domestic and international economic outlook.

Bank Al-Maghrib decided at its third quarterly meeting of 2026, maintaining the rate at the level it has held since March 2025. The bank said the decision reflected moderate medium-term inflation and expectations for continued activity in the non-agricultural economy, while highlighting “the very high level of uncertainty surrounding the economic outlook”.

The central bank said it would continue to monitor domestic and external developments and make monetary policy decisions on a meeting-by-meeting basis using the latest available data. Its latest projections put economic growth at 4.4 percent in 2026, down from 4.9 percent in 2025, before slowing to 2.9 percent in 2027. Non-agricultural activity is projected to grow 3.1 percent this year and 4 percent next year.

The forecast comes against stronger recent economic activity than the annual projection alone suggests. Morocco’s High Commission for Planning estimated that the economy grew 4.8 percent year on year in the second quarter of 2026, driven by stronger agricultural activity, resilient services and domestic demand. It forecast growth of 5.4 percent in the third quarter.

Moroccan dirham banknotes are pictured in different denominations, highlighting the country’s currency as Bank Al-Maghrib maintains its benchmark interest rate at 2.25 percent. Photo: Asharq Al-Awsat

Inflation has meanwhile remained subdued. Bank Al-Maghrib said consumer-price inflation averaged 0.3 percent during the first eight months of 2026 and forecast an average of 0.7 percent for the full year, before rising to 1.5 percent in 2027. Core inflation is projected to move from negative 0.2 percent in 2026 to 2.2 percent in 2027 as the effect of lower food prices, particularly olive oil, fades and imported inflation remains relatively elevated.

The latest consumer data released by the High Commission for Planning showed that Morocco’s consumer price index rose 0.8 percent month on month in August, with food prices increasing 0.9 percent and non-food prices 0.7 percent. Underlying inflation rose 0.2 percent over the month and 0.1 percent year on year.

Bank Al-Maghrib also pointed to external risks. Its assessment includes geopolitical tensions, disruptions to energy and food supply chains, commodity-price volatility and uncertainty surrounding the global economic environment. The central bank said the impact of higher global energy prices on Moroccan domestic prices had so far remained limited, partly because of support for road transport operators and continued regulated prices for butane gas and electricity.

The decision had been widely anticipated. Before the meeting, BMCE Capital Global Research reported that all 10 Moroccan institutional investors it surveyed expected the benchmark rate to remain at 2.25 percent. Economist Mohammed Jadri told Le360, “At this stage, I see neither an urgent need to cut the rate further nor a need to raise it immediately.”

Economist Khalid Doumou said monetary policy alone could not address Morocco’s employment challenges, arguing that growth also needed to be directed towards sectors capable of creating jobs. He also pointed to geopolitical and energy-supply risks affecting the outlook.

The central bank’s latest decision therefore leaves borrowing costs unchanged while policymakers assess a combination of subdued inflation, continued economic activity, agricultural conditions and external risks. The next monetary-policy decision will provide another opportunity to reassess those factors using updated economic data.