During its second quarterly meeting on June 20, 2023, Bank Al-Maghrib made the decision to keep the key interest rate unchanged at 3%.
This follows three consecutive rate hikes totaling 150 basis points. The decision to pause the tightening cycle of monetary policy takes into consideration the evolving economic situation and the impact of previous rate adjustments, said a statement from the central bank.
The bank’s Council reviewed and approved the annual report on the country’s economic, monetary, and financial situation, which also highlighted the bank’s activities throughout the fiscal year 2022. Global economic trends were analyzed, with particular attention given to uncertainties arising from the conflict in Ukraine.
In major advanced economies, inflation has been gradually declining, although it remains above central banks’ targets due to lower energy and food prices.
At the national level, recent economic developments were examined, including the decelerating inflation rate, which peaked at 10.1% in February 2023.
Despite the decline, inflation remains high due to rising prices of fresh food products. It is projected to average 6.2% this year and 3.8% in 2024, with similar projections for the underlying inflation component.
The Council also discussed international commodity markets, noting the decline in prices influenced by the conflict in Ukraine. Brent crude oil prices, for instance, experienced an annual decrease of 32.6%, averaging $75.7 per barrel in May.
Food prices are expected to decrease by 10.9% this year and remain relatively stable in 2024, while phosphate and its derivatives are anticipated to follow a downward trend as supply disruptions ease and input costs decrease.
In terms of global and regional growth forecasts, the deceleration of global economic activity is expected to be slightly less rapid than previously anticipated. The United States is projected to experience average growth of 1% in 2023 and 2024, while the eurozone’s growth would decline to 1.4% this year and 0.8% in 2024.
The United Kingdom is expected to avoid a recession but have weak economic growth, with a volume GDP increase of 0.1% this year and 0.4% in 2024. In emerging economies, China’s economy is forecasted to grow by 6.1% in 2023 and 4.8% in 2024, while India’s growth rate is estimated at 5.4% and 6.7%, respectively, driven by infrastructure investments.
Despite facing challenges stemming from two consecutive years of drought and an unfavorable external environment, the Moroccan economy is projected to show signs of improvement.
Agricultural value-added growth is expected to reach 1.6% in 2023 after a contraction of 12.9% in the previous year, while non-agricultural sectors are projected to grow at a slower pace with a value-added increase of 2.5% in 2023 and 3.2% in 2024.
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