The Moroccan central bank (Bank Al-Maghrib) decided, on Tuesday, to raise the key rate by 50 basis points to 2.50 percent.
The bank’s board explained, in a statement following its quarterly meeting, that this decision was made to counter an inflation that is expected to reach 6.6 percent in 2022, after 1.4 percent in 2021, driven mainly by an acceleration in food and fuels and lubricants prices.
Inflation would subsequently average 3.9 percent in 2023 before rebounding to 4.2 percent in 2024, in line with the planned decompensation of subsidized products.
Despite signs of deceleration in some countries, inflation remains very high overall, leading central banks to continue their largely synchronized tightening of monetary policy.
Nationally, and after the 7.9 percent rebound posted in 2021, economic growth would, according to Bank Al-Maghrib’s updated projections, slow down sharply this year to 1.1 percent, as a result of a 15 percent decline in agricultural value added and a 3.4 percent slowdown in the pace of non-agricultural activities.
In 2023, the growth rate is expected to speed up to 3 percent, driven by the 7 percent increase in agricultural value added, under the assumption of a return to average cereal production, while growth in non-agricultural activities is projected to decelerate to 2.4 percent, suffering in particular from the deterioration of the external environment.