World Bank offers a realistic outlook on Morocco’s growth, inflation trends

During its annual meetings with the World Bank this October, the International Monetary Fund’s (IMF) “World Economic Outlook” report presented a more realistic view of Morocco’s anticipated macroeconomic and financial outlook.

In its latest updated forecasts for October 2024, released on Tuesday, the IMF predicts “Morocco’s economy will grow by 2.8% by the end of 2024 and 3.6% in 2025.” These projections align with Bank Al-Maghrib’s estimates more than the Moroccan government’s.

For context, while presenting the finance bill last week, Minister of Economy and Finance Nadia Fettah emphasized that “Morocco has maintained macroeconomic stability, with projected growth of 3.3% in 2024. The government aims for a robust economic recovery, targeting 4.6% growth in 2025 and keeping inflation at 2%.”

On the inflation front, IMF experts expect it to stabilize at 1.7% in 2024, with a slight increase to 2.3% in 2025.

These figures, presented during the annual meetings of the World Bank and IMF, are closely aligned with the government’s economic assumptions used to prepare the 2025 finance bill, which is currently being discussed in Parliament.

Keeping inflation within the target range is a key priority for the Moroccan central bank’s monetary policy, aiming to achieve price stability linked to maintaining inflation around 2%.

On a regional level, the Moroccan economy is in line with growth trends in the Middle East and North Africa, which is expected to see a growth rate of 2.1% in 2024, rising to 4.0% in 2025. Inflation in the region is projected to be between 14.8% in 2024 and 11.6% in 2025.

On the international level, the IMF noted in its report that “the severity of cyclical imbalances has diminished since the start of 2024, resulting in better alignment between economic activity and potential output in major economies.”

The report stated that this adjustment process helps “align inflation rates across countries, with experts highlighting its overall contribution to the decline in global inflation.”

The IMF noted, “overall global inflation is expected to drop from an annual average of 6.7% in 2023 to 5.8% in 2024 and 4.3% in 2025, with advanced economies likely to return to their targeted inflation levels faster than emerging and developing economies.”

While global inflation continues to decline, primarily in line with the baseline scenario, challenges to achieving price stability remain. “Although commodity prices have stabilized, service price inflation is still high in many regions, highlighting the need to understand sector dynamics and adjust monetary policies,” the report states.

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