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Morocco’s central bank has raised its inflation forecasts for 2022 and confirmed a slowdown in growth due to a surge in fuel prices and an exceptional drought the country is likely to face
Morocco’s central bank has raised its inflation forecasts for 2022 and confirmed a slowdown in growth due to a surge in fuel prices and an exceptional drought the country is likely to face.
Inflation is estimated to reach 5.3% for the whole of 2022, against 1.4% in 2021, according to the projections of Bank Al-Maghrib (BAM), the Moroccan central bank. The initial forecast of inflation was 4.7% for the current year. The high inflation is driven mainly by the surge in energy and food prices .
At the same time, BAM expects growth to slow to 1% after rebounding to more than 7.9% in 2021. The government initially expected that inflation would clock at 3.2%. This situation is fueled by “the international situation which remains marked in particular by the stalemate in the war in Ukraine. Climatic conditions also would contribute to the slowing down of the economy.
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Morocco has been facing continuous price increases for several months, particularly for hydrocarbons. The surge in prices in this North African country is coupled with a poor harvest due to exceptional drought. The Moroccan economy remains dependent on the agricultural sector (14% of GDP). The government has doubled the budget to absorb the increased subsidies for butane gas, flour, and sugar to 32 billion dirhams (EUR 2.8 billion). It has also disbursed about 1.4 billion dirhams (about EUR 130m) since April to help road transporters (180 000 vehicles) following a strike.
