Growth, inflation, external accounts… Bank Al Maghrib forecasts

While inflation should continue its downward trend, closing the year at around 1%, the growth of the national economy would fall compared to the previous year, forecasts Bank Al Maghrib

The Board of Bank Al-Maghrib (BAM) held its fourth quarterly meeting for 2024 on December 17, where it reviewed the main developments in the international and national economic situation.

Thus, the Council noted that the global economy continues to be generally resilient, despite a high level of uncertainties. “ These are mainly linked to conflicts and geopolitical tensions, as well as to the measures announced by the new American Administration and the consequences of their implementation. », Indicates the central bank in a press release.

A growth rate of 5.7% in 2025

Regarding the national economy, BAM expects a deceleration in growth, which should be limited to 2.6% this year, compared to 3.4% last year. This slowdown, explains the same source, would be the result of a quasi-stability of non-agricultural growth around 3.5% in 2024 and a decline of 4.6% in agricultural value added, due to climatic conditions. unfavorable.

Over the next year, non-agricultural activities are expected to improve, with an increase of 3.6% in value added in 2025, then 3.9% in 2026. In turn, agricultural value added should record an improvement of 5.7% in 2025 and 3.6% in 2026. BAM bases these forecasts on the assumption of cereal harvests of 50 million quintals equivalent to the average of the last 5 years.

Thus, the growth of the national economy would accelerate over the next two years to 3.9%, predicts the institution headed by Abdellatif Jouahri.

Inflation at 1% at the end of 2024

Having been falling for several quarters, after peaks in 2022 and 2023, inflation is expected to continue its decline. Bank Al Maghrib therefore expects an average inflation rate of around 1% at the end of 2024, compared to 6.1% last year. Over the next two years, inflation is expected to remain moderate in the medium term, reaching 2.4% in 2025 and 1.8% in 2026, according to BAM projections.

Regarding the underlying component of inflation, which reflects the fundamental trend in prices, it is expected to continue its deceleration, falling from 5.6% in 2023 to 2.1% this year, then to 2% in 2025 and 1.8% in 2026, adds the same source.

Prices of food products with volatile prices would decline by 2.8% in 2024 after a cumulative increase of more than 30% over the previous two years, then increase by 1.9% in 2025 before stabilizing in 2026. For their part, the prices of fuels and lubricants would show a decline of 2.8% instead of -0.3%, a trend which would continue in the medium term. On the other hand, after an increase of 1.2% in 2024, regulated prices would show increases of 4.1% in 2025 and 3.3% in 2026, essentially taking into account the continuation of the gradual process of decompensation for butane gas. , details the central bank.

The situation of the labor market in “ relative ” improvement

« After a long time we have good news », Commented the governor of BAM, referring to the latest employment figures showing the creation of 213,000 new positions between the third quarter of 2023 and the same quarter of 2024, after a loss of 297,000 a year earlier.

Indeed, with the exception of agriculture which suffered a further loss of 124,000 jobs, the other sectors recorded creations amounting to 258,000 positions in services, 57,000 in construction and 23,000 in industry including crafts, recalls BAM.

During the same period, the activity rate increased in the third quarter by 0.4 points to 43.6%, with the entry of 271,000 job seekers. On the other hand, the unemployment rate has “ slightly increased » to stand at 13.6% at the national level, varying from 7.4% in the countryside to 17% in the cities, with a peak of 50.3% among young urban dwellers aged 15 to 24, notes the same source.

Narrowing of the current account deficit

Moroccan exports are expected to continue their growth, marking an acceleration from 5.5% this year to 8.9% in 2026. This improvement would essentially reflect the continued dynamic of sales in the automotive sector which should reach 200 billion dirhams (MMDH) in 2026 and the resumption of those of phosphate and derivatives which would be around 100 billion dirhams.

In addition, travel receipts should maintain their good performance, closing the year with an increase of 9.1%. This increase would continue until 2026 to reach MAD 128 billion in 2026. Similarly, 2024 will also be marked by an increase in transfers from MREs to 4.3%. Over the next two years, this development would continue at an annual rate of between 3% and 3.5% to reach around 128 billion dirhams in 2026.

In turn, imports would experience an increase of 4.6% in 2024, then 7.9% in 2025 and 6% in 2026. This development would be the result “ in particular the expected increase in acquisitions of capital goods linked to the implementation of numerous infrastructure projects “. At the same time, the decline in international oil prices would lead to a drop in the energy bill, which is expected to fall by 6.9% this year, stabilize in 2025 and fall by 4.1% in 2026 to nearly 110 billion dirhams.

Thus, according to BAM forecasts, the current account deficit would remain contained, standing at the equivalent of 1% of GDP in 2024 and below 2% of GDP over the next two years.

At the financial account level, receipts from foreign direct investments would improve, going from the equivalent of 2.7% of GDP in 2024 to 3.3% in 2026. In total, and taking into account planned external financing from the Treasury, Bank Al-Maghrib’s official reserve assets would gradually strengthen to stand at MAD 400.2 billion at the end of 2026, representing nearly 5 months and 8 days of imports. of goods and services », Indicates the central bank.

Increase in the need for bank liquidity

In terms of monetary conditions, the need for bank liquidity, driven mainly by the expansion of fiat currency, would continue to grow to reach MAD 192.3 billion in 2026. Taking into account the expected evolution of economic activity and the expectations of the banking system, the rate of growth of credit to the non-financial sector should gradually accelerate, from 3.8% in 2024 to 5.5% in 2026, BAM reports.

The effective exchange rate is expected to continue its slight appreciation in real terms with a rate of 0.5% in 2024 and 0.3% in 2025, mainly due to the appreciation of its value in nominal terms, before a drop in 0.6% in 2026.

In terms of public finances, budget execution for the first ten months of 2024 shows an improvement of 13.6% in ordinary revenues, driven in particular by the notable performance of tax revenues. At the same time, overall spending increased by 7.4%, reflecting in particular the increase in spending on goods and services and investment.

In view of these achievements, data from the 2025 Finance Law and the 2025-2027 three-year budget programming, as well as new macroeconomic projections from Bank Al-Maghrib, the budget deficit, excluding proceeds from the sale of State participations , should be at 4.5% of GDP in 2024, before gradually decreasing to 4.2% of GDP in 2025, then to 3.9% in 2026, adds the same source.

During this meeting, the BAM Board of Directors decided to lower the key rate by 25 basis points to 2.50%.