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RABAT, Dec 22 (Reuters) - Morocco's central bank held its benchmark interest rate stable at 2.5 percent on Tuesday and said economic growth was expected to slow to 2.1 percent next year down sharply from this year's 4.5 percent which was boosted by a bumper grain harvest.

Inflation was expected to remain stable with an average of 1.6 percent in 2015 and by 1.2 percent over the next year, the bank said. However, government plans to start cutting sugar subsidies in January would add slightly to 2016 inflation, it added.

Morocco has done more than most North African countries to make painful changes required by international lenders to curb deficits, such as ending fuel subsidies and freezing public sector hiring. The government still controls the prices of wheat and cooking gas.

Growth was expected to be affected next year by more modest agricultural output.

Agriculture accounts for 15 percent of gross domestic product (GDP) and country's economic performance this year was boosted by a record 11 million tonne cereal crop which followed favourable rains.

The drop in global oil prices also revived public finances and reduced deficits in the biggest regional energy importer.

Based on an average global oil price of $51.4 a barrel, the bank said the current account deficit should narrow to 2.2 percent of GDP in 2015, and around 1 percent in 2016.

The trade deficit narrowed 19.7 percent in the first 11 months of 2015 while foreign exchange reserves reached 220.8 billion dirhams ($22.45 billion) at the end of November, covering almost seven months of import needs.

The government expects a budget deficit of 4.3 percent of GDP -- down from 4.9 percent in 2014 -- which the bank said it would meet. It expected the deficit to be down to 3.5 percent in 2016.

Earlier this year, the bank, known as Bank al-Maghrib, also reduced the euro's weighting in the currency basket used to set the dirham's exchange rate, to reflect a fall in trade with the euro zone.

($1 = 9.8340 Moroccan dirham)

(Reporting by Aziz El Yaakoubi; Editing by Louise Ireland) ((aziz.elyaakoubi@thomsonreuters.com; +212623934595)(;))

Keywords: MOROCCO INTEREST RATE/