The Central Bank of Morocco (BAM) again raised its key rate by 50 basis points on Tuesday, to 2.50%, in order to curb high inflation, the institution said after the quarterly meeting of its advice.
To (…) promote the return of rate inflation in line with the objective of price stability, the Council decided to raise the key rate by 50 basis points to 2.50%, justified the BAM in a press release
The central bank had already increased its key rate by 50 basis points during its last board meeting in September.
This monetary tightening occurs in a climate of strong inflationary growth, slightly decelerating, fueled by soaring commodity prices worldwide following the war in Ukraine.
The international economic situation remains marked by the stalemate of the conflict in Ukraine, geopolitical and economic fragmentation and the aftermath of the pandemic, notes the institution.
At the national level, the Council indicates that this environment weighs on economic activity and on the evolution of inflation, which will have to continue to register high rates for a period much longer than expected in September, impacted in particular by the pressures external, underlines the press release.
The BAM now expects inflation to be 6.6% in 2022, compared to 1.4% in 2021, mainly due to rising food and fuel prices. It should return to 3.9% in 2023 (+4.2% in 2024).
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Economic growth will mark a sharp slowdown this year, to 1.1%, after the 7.9% rebound recorded in 2021.
The BAM expects growth to resume by just 3% in 2023, provided there is a return to average cereal production, after an unprecedented drought in recent months.
The economy of the Maghreb country remains largely dependent on the agricultural and fishing sector, which still represented nearly 12% of GDP in 2020.