Toward an Inflation Targeting Policy in Morocco: Analysis of Key Macroeconomic Aggregates through the Hodrick-Prescott Filter

Abstract

Morocco has expressed its intention to adopt an inflation-targeting (IT) monetary framework, addressing the limits of traditional approaches based on monetary aggregates or fixed exchange rates. International evidence shows that IT enhances price stability, credibility, and transparency. Successful implementation requires solid macroeconomic foundations and institutional readiness. This study examines Morocco’s main aggregates using the Hodrick-Prescott filter to separate long-term trends from short-term cycles. By identifying structural growth and cyclical fluctuations, the analysis highlights periods of stable expansion and controlled inflation, providing insights into the country’s preparedness for IT and emphasizing the role of macroeconomic stability as a prerequisite for an effective inflation-targeting policy.