The central bank maintained the status quo. The key interest rate remained unchanged at 3%. The decision made by Bank Al-Maghrib’s Board of Directors on Tuesday September 26 was widely anticipated by investors. It comes against a backdrop of decelerating inflation.
Inflation fell from a year-on-year peak of 10.1% in February to 5% in August, largely as a result of the measures introduced by the government. In addition, external pressures have eased and monetary policy has been tightened. Bank Al-Maghrib expects inflation to continue to slow, from 6.6% in 2022 to 6% on average this year, before settling at 2.6% in 2024. The underlying component should follow a similar trajectory, falling from 6.6% to 5.6% and 2.3% respectively.
Up to now, the central bank has carried out three successive rate hikes. A monetary tightening whose transmission « to monetary conditions and the real economy remains partial «. At least, this is what the central bank’s preliminary assessments point out.
The Board’s decision to keep the key rate unchanged was prompted not only by the decline in inflation, but also by the high level of uncertainty linked to the evolution of the international economic situation and to the domestic context in the wake of the Al Haouz earthquake. The impact of the earthquake on the economic and social spheres, and on the actions taken by all stakeholders to deal with it, will be taken into consideration at forthcoming meetings.
In terms of growth, the central bank is a little more optimistic. It expects GDP to reach 2.9% this year, whereas in June it had forecast a rate of 2.4%. Growth should rise to 3.2% in 2024, subject to a good agricultural year. In any case, these growth forecasts do not take into account the consequences of the Al Haouz earthquake and the fallout from the reconstruction and recovery measures announced. These forecasts are based on the assumption of a 5% increase in agricultural value added in 2023 and 5.9% in 2024, subject to an average cereal production of 70 million quintals. « For non-agricultural activities, the pace of growth is expected to slow to 2.6% in 2023, followed by an acceleration to 3% in 2024 «, notes Bank Al-Maghrib. In any case, the long-awaited acceleration in non-agricultural activities is still a long way off!. ..
Khadija MASMOUDI
