Inflation in Morocco peaked last February, reaching 10.1%, before gradually declining back to 4.3% in October, according to the most recent Bank Al Maghrib (BAM) report.
The development of inflation this year is expected to end at 6.1%, compared to 6.6% in 2022, according to data contained in a press release from the Bank of Morocco on the occasion of its last quarterly meeting for the year 2023.
The Central Bank attributed the reason for the decline in inflation to the expected disappearance of external source inflationary pressures, the direct effects of the tax measures of the Finance Law for the year 2024, as well as the gradual lifting of support from the Clearing Fund as expected in the budget programming for 2024-2026, and with the assumption of near stability in food prices with fluctuating prices.
In connection with this, the Bank of Morocco indicated that inflation expectations by financial sector experts in the medium term, as stated in the institution’s quarterly survey, continued to decline in the fourth quarter of 2023, and that the cumulative transfer of its last three decisions to raise the main interest rate to monetary conditions and the economy. The real is continuous.
The Council considered that the current level of the main interest rate, i.e. 3%, “remains appropriate, and would facilitate the return of inflation to levels consistent with the goal of price stability,” declaring that it decided “to keep it unchanged while continuing to closely track the development of the economic situation and inflationary pressures.” “Both at the national and international levels.”
Regarding oil prices, which are still experiencing turmoil, the Bank of Morocco expects their price to stabilize at $87.3 per barrel in 2024, and at $86.6 in 2025.
The Central Bank of Morocco expected that the prices of phosphate and its derivatives would decline, partly linked to the decline in input prices, especially natural gas. Therefore, global prices are expected to decrease gradually, moving from $772 per ton in 2022 to $400 in 2025 for diammoniac phosphate. While the price of raw phosphate is expected to rise by 27.8% in 2023 to $340 per ton, and to gradually decrease to settle at $250 in 2025.
On the other hand, the Bank of Morocco expected that the repercussions of the earthquake, which struck a number of regions in the High Atlas on September 8, would be weak on economic activity, according to various assessments completed. Including those prepared by the Bank of Morocco. The implementation of the many major projects, expected or ongoing, at the national level, “raises hope for a new dynamism of investment and economic activity in the medium and long term.”
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