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Rabat, June 18 (Reuters) - Morocco's central bank kept its key interest rate unchanged at 3.0 percent on Tuesday, forecasting inflation would stay in line with its price stability objective and as the government maintains the current subsidy system.

The central bank estimates that inflation in the next six quarters should remain broadly in line with the price stability objective in the medium term.

"Inflation would hover around 2.1 percent in 2013 and 1.6 percent in the third quarter of 2014, averaging 2 percent over the forecast horizon," the bank said in a statement.

Its forecast assumed that the government would maintain its current system of food and fuel subsidies. The government, however, has said it would reduce the subsidies by 20 percent if commodity prices allow, according to its 2013 budget.

Indeed, although the Islamist-led government has not started to reform subsidies due to the political sensitivity of the matter, subsidy costs fell 32 percent at the end of April 2013 as international commodity prices fell in the first half of this year.

The central bank said the budget deficit reached 18.6 billion dirhams ($2.2 billion) at the end of April 2013, against 15.1 billion in the same period of last year, although subsidy costs fell 31.9 percent.

The bank expects the deficit to come to 5.5 percent of GDP in 2013, down from 7.6 percent in 2012. GDP growth is expected at 4.5 to 5.5 percent this year, with less rapid growth in non-agricultural GDP of 2.5 to 3.5 percent.

"Under these conditions, the non-agricultural output gap would remain below zero in the short run, indicating the absence of inflationary pressures from domestic demand," it said.

At the end of May, the trade deficit fell 7.3 percent from a year earlier to 81.61 billion dirhams as imports fell 4.7 percent. Remittances from the 4.5 million Moroccans living abroad and tourism receipts rose respectively by 1 and 3.1 pct.

(Reporting By Aziz El Yaakoubi; Editing by Susan Fenton)

((Aziz.ElYaakoubi@thomsonreuters.com))

Keywords: MOROCCO INTEREST/RATE