HCP Forecasts Deceleration of Money Supply in 2022

Growth of the money supply should slow down to 4% in 2022, after 5.7% forecast in 2021, according to the High Commission for Planning (HCP).

“The evolution of monetary aggregates in 2022 is based on the prospects of national economic activity and net external flows, notably the balance of trade, travel receipts and transfers from Moroccans living abroad,” says the HCP in its 2022 Economic Exploratory Budget.

It also includes, according to the same source, the renewal of the measures put in place by Bank Al-Maghrib in 2021 for the financing of the economy, in particular, the maintenance of the key interest rate unchanged and the total release of the reserve requirement of banks.

Taking into account these hypotheses, the expected outflows of the Treasury abroad as well as an average level of net flows of foreign direct investments (FDI) of about 3% of the gross domestic product (GDP), the foreign exchange reserves should be close to 311 billion dirhams at the end of 2022 to represent 6 months and 9 days of imports instead of 6 months and 27 days in 2021.

Bank credits should increase by 4.4% instead of 4% expected in 2021, the same source said, adding that claims on the Central Administration should continue to increase, in connection with the Treasury’s more pronounced recourse to the domestic market to cover its commitments for economic recovery.