Bank Al-Maghrib (BAM), the central bank of Morocco, has made a bold prediction about inflation for the coming years. The bank expects inflation to remain high in the medium term, with an average of 5.5% forecasted for 2023 before dropping to 2.3% in 2024.
This announcement follows an inflation rate of 6.6% in 2022, which was the highest it has been since 1992.
BAM’s first quarterly meeting of the year was followed by a press statement discussing the inflation forecast.In the statement, the central bank revised its December 2022 forecast by increasing the expected underlying component of inflation to 6.2% for 2023.
The increase is due to a surge in the prices of certain food products, which are included in the calculation of inflation.
The bank also predicts that shocks causing the increase in inflation will gradually dissipate in the second half of 2023, following government measures aimed at stabilizing the market. However, the decompensation of the prices of subsidized products is expected to keep inflation overall at a high level of 3.9%.
Despite some relief from external pressures, inflation is still accelerating due to internal supply shocks on certain food products.
BAM recognizes the government’s efforts to improve the supply of these products and ensure their markets function properly.
BAM’s projections for 2024 are based on the assumption that both internal and external pressures will continue to ease, leading to a fundamental price trend of 2.3%. These predictions are important for businesses and individuals to consider when making financial decisions.
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