(Ecofin Agency) - Morocco's GDP is projected to grow by 2.8% in 2024 and accelerate to 4.5% in 2025, according to a June 25 statement from the Central Bank.

Non-agricultural activities are expected to increase by 3.8% in 2024 and 4.1% in 2025. The agricultural sector, however, is predicted to contract by 6.9% in 2024 before rebounding with 8.6% growth in 2025.

The Central Bank attributes the strengthening of non-agricultural activities to several factors. These include the expansion of construction projects, robust tourism industry performance, and increased household consumption driven by lower inflation and wage hikes.

For the agricultural sector, Bank Al-Maghrib (BAM) forecasts a cereal harvest of 31.2 million quintals this year, based on data from the Ministry of Agriculture. Next year, the harvest is expected to return to an average of 55 million quintals. The Central Bank also noted that economic growth reached 3.4% in 2023, up from 1.5% in 2022.

Furthermore, the institution decided to reduce its key interest rate by 25 basis points to 2.75%. This decision reflects significant progress in reducing inflation to levels consistent with price stability goals and supporting the post-COVID economic recovery.

After peaking at 6.6% in 2022 and 6.1% in 2023, inflation has recently dropped due to easing external pressures and falling food prices. The average inflation rate is expected to be 1.5% this year, rising to 2.7% in 2025.