According to BKGR, the Moroccan economy is demonstrating strong performance. Following a growth of 4.8% in the first quarter and 4.6% in the second, growth is expected to be around 4.4% in the third quarter. This momentum is driven by the services sector, construction, extractive industries, and agriculture, largely supported by sustained domestic demand.
In June, BAM raised its growth forecasts for 2025 to 4.6%, with a consolidation expected to 4.4% in 2026. Inflation remains under control, recorded at +0.5% year-on-year at the end of July, with core inflation at 0.9%. However, its trajectory is dependent on several uncertainties, including global commodity prices, geopolitical tensions (in Ukraine and the Middle East), new U.S. trade policies, and agricultural yield volatility.
The budget deficit reached -54.1 billion MAD at the end of August, compared to -32.8 billion MAD a year earlier. Nevertheless, BAM anticipates a gradual reduction, projecting -3.9% of GDP in 2025 and -3.4% in 2026. Meanwhile, the total amount of bank credit has increased by 4.9% year-on-year, benefiting from favorable financing conditions following a 25 basis point cut in the key interest rate in March 2025.
Divergent investor expectations are evident. A survey conducted by BKGR among Moroccan institutional investors reveals mixed opinions: 89% consider the current monetary policy adequate, 56% anticipate another 25 basis point cut in September, and 33% aim for a key rate of 2% by the end of 2025, implying at least one more reduction by December.
Despite easing inflation, rising geopolitical risks lead BAM to adopt a cautious stance. The strength of growth and the recent status quo of the ECB reinforce this choice. BMCE Capital therefore favors maintaining the key interest rate during the September Council meeting. “While investor sentiment remains divided, we prefer to maintain the status quo for our central scenario with a downward outlook by the end of 2025,” conclude the analysts.
You might also like
Loading related...