Investors expect Morocco to hold rates at 2.25% despite falling consumer prices

Bank Al-Maghrib is expected to keep its benchmark interest rate at 2.25% on September 22, according to BMCE Capital Global Research, as strong economic growth and concerns about imported inflation outweigh July’s decline in consumer prices.

All 10 Moroccan institutional investors surveyed by the research firm predicted an unchanged rate and considered that decision appropriate.

Growth supports a pause

Morocco’s consumer price index fell 0.6% year on year in July, following a 0.3% increase in June. Food prices declined 1.9%, while nonfood prices dropped 0.3%.

BMCE Capital Global Research cautioned that the factors driving prices lower could prove temporary, citing energy costs and uncertainty over international monetary policy.

Economic activity has meanwhile remained strong. GDP grew 4.8% in the second quarter after 5% in the first, and the High Commission for Planning projects 5.4% growth in the third quarter.

The research firm forecasts full-year growth of 5.1%, supported by agriculture’s recovery and investment. Bank Al-Maghrib’s June forecast put growth at 5.2% in 2026, slowing to 3.1% next year.

The central bank projects average inflation of 1.5% this year and 2.1% in 2027.

Trade deficit widens as borrowing costs rise

Morocco’s trade deficit widened 26.5% to 244.7 billion dirhams through July as imports grew faster than exports. Bank Al-Maghrib forecasts a current account deficit equivalent to 4% of GDP this year.

Public finances showed an improvement: the budget deficit narrowed to 48.2 billion dirhams through July from 53.7 billion a year earlier.

Borrowing conditions tightened during the second quarter, with the average bank lending rate rising 15 basis points to 4.81%. Outstanding bank credit declined 1.2% in July to 1,286.2 billion dirhams, although the central bank still expects annual lending to the nonfinancial sector to grow 6.8%.

Nine of the 10 surveyed investors expected credit to expand in 2026, while six anticipated stable lending rates. Nine also saw 2.25% as the likely benchmark rate at year-end, suggesting expectations of a prolonged pause despite the recent decline in domestic consumer prices.