With a key rate reduced to 2.50% in December 2024, i.e. its level at the end of 2022, BAM has clearly marked its commitment to supporting economic recovery. This drop is justified by the easing of inflationary tensions, after a historic peak of 10% recorded in February 2023. For AGR, the combined efforts of BAM and the government, including targeted budgetary measures and support for agricultural production chains, have helped bring inflation back to these current levels, reaching 0.7% in October 2024. Projections for 2025 confirm this trend, with headline inflation expected at 2.4% and underlying inflation stabilized below 2%.
Support investment and preserve budgetary balances
Continuing to lower rates would have several positive effects for the Moroccan economy. Firstly, it would help reduce interest charges for the Treasury, providing valuable fiscal space in a context where significant public investment is necessary. Post-earthquake reconstruction, the energy transition and the organization of the 2030 World Cup require significant resources, estimated at around 1.7 trillion dirhams between 2025 and 2030, the equivalent of 1.2 times the GDP of the Morocco.
In addition, a reduced financing cost would promote the revival of private investment, key to boosting economic growth, forecast at 3.9% in 2025 compared to 2.6% in 2024.
According to the Research Office, the two reductions in the key rate in 2024 would save the Treasury an annual interest charge of around 620 million dirhams.
Alignment with major global trends
Morocco is not isolated in this strategy. Major central banks, such as the ECB and the Fed, have also initiated cycles of reducing their key rates. In 2024, the ECB lowered its main rate by 100 basis points, and the Fed plans a cumulative easing of 100 basis points in 2025. This alignment of international monetary policies offers a window of opportunity for Morocco to adjust its own rates without compromising the competitiveness of its currency. However, certain risks remain. Climatic hazards, social dialogue, and the continuation of the gas decompensation process could create localized inflationary tensions. Bank Al-Maghrib will thus have to juggle between economic support and vigilance in the face of signals of overheating.
For now, indicators point towards a scenario where BAM will still have room to maneuver to lower its key rate in 2025, thus consolidating a sustainable and balanced economic recovery.
