Morocco's central bank maintained its policy rate at 3.0 percent, saying inflation is forecast to remain in line with the banks' objective of price stability.
The Bank of Morocco, which has kept its benchmark rate steady since March 2012, forecast inflation of 0.9 percent in 2014, down from 1.9 percent in 2013, with an average rate of 1.3 percent over its forecast horizon and 1.5 percent by the third quarter of 2015, the end of this horizon. Underlying inflation is forecast to remain below 2.0 percent.
The central bank also revised downward its forecast for economic growth this year to between 2.5 percent and 3.0 percent from its March forecast of 2.5 to 3.5 percent.
The contribution of agriculture would decline in 2014 compared with last year while the growth of non-agricultural activities would pick up to around 4.0 percent, the bank said.
But the output gap of the nonagricultural sector would continue to remain negative so there are no inflationary pressures from this sector, the central bank said.
In 2013 Morocco's economy expanded by 4.4 percent in 2013, driven by a 19 percent expansion of agricultural value added while the non-agricultural part of the economy decelerated to growth of 2.3 percent from 4.4 percent in 2012.
In the first quarter of this year, Morocco's Gross Domestic Product expanded by 2.5 percent from the previous quarter for annual growth of 2.5 percent, down from 4.5 percent in the fourth quarter.