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Weekly highlights

Inflation: BAM tightens its monetary policy

I N an attempt to curb galloping 116 sections of goods and services
that make up the reference basket
inflation, the Board of Bank
of the consumer price index, 60.3%
Al-Maghrib (BAM) increased
the key rate by 50 basis points to experienced an increase of more
2%. The decision was made during than 2% in August versus 42.2% in
the meeting held on Tuesday, Sep- January”, explains BAM who fore-
tember 27. Under these conditions, casts the acceleration of inflation
going into debt will become more to 6.3% over the whole year versus
expensive for all economic players. 1.4% in 2021. The return to a “more
This should result in a decrease in suitable” rate is expected next year,
demand for goods and services and namely 2.4%.
subsequently in prices. This is the Being pessimistic, the central bank
normal or ideal scenario, except has revised downwards its growth
that in Morocco, inflation is main- forecasts for this year: 0.8% versus
ly imported, the country sourcing 7.9% of GDP in 2021. This is a very
energy and food products, especial- low level which is explained by the
ly cereals, from abroad. With this 14.7% drop in agricultural value
increase, the central bank wants added and by a 3.4% deceleration
to “prevent any de-anchoring of Abdellatif Jouahri, Wali of Bank Al-Maghrib. According to Bank Al-Maghrib’s projec- in non-agricultural activities. In
tions, the budget deficit is expected to decline from 5.9% of GDP in 2021 to 5.5% in 2022
inflation expectations and ensure before easing to 5% in 2023 2023, growth should accelerate to
the conditions for a rapid return to 3.6% under the effect of an 11.9%.
levels in line with the objective of priations Bill, the picture drawn of in inflation ”, the central bank said. increase in agricultural value added.
price stability”. Bank Al-Maghrib the economic situation is far from Inflation reached 8% in August after On the other hand, the non-agricul-
intends to closely monitor the eco- encouraging: “the economy conti- 7.7% in July, being mainly driven tural sector should not slow down,
nomic situation, at the national and nues to suffer from this unfavorable by the rise in the price of food pro- settling at 2.5%! The Board also
international levels, and in parti- external environment and of the re- ducts and of fuels and lubricants. expects a budget deficit of 5.5%
cular the evolution of inflationary percussions of a particularly severe “The available data do point to an versus 5.9% in 2021.o
pressures. A few weeks before the drought, with a sharp deceleration increasingly wide dissemination of Khadija MASMOUDI
presentation of the 2023 Appro- in growth and a sharp acceleration the price increase. Indeed, of the

Fertilizer: Morocco, soon to be a market maker

F OOD insecurity: this is the rocco, Fitch’s report added. As for the
outlook of global demand for fertili-
new phobia of world leaders
zers, Fitch maintains that it would rise
since the beginning of the
Ukrainian crisis. In a joint statement to above 2022-levels in 2023 before
issued after a ministerial meeting returning to pre-Ukraine war levels
on the sidelines of the UN General in the US and Europe, while prices
Assembly in New York, the US, the would remain high up to 2026.
EU, the African Union, Colombia, As a reminder, the Moroccan produ-
Nigeria, and Indonesia affirmed cer reported an exceptional increase
their “commitment to act with ur- in its revenues and its turnover com-
gency, at scale, and in concert to pared to last year, in its last report on
respond to the pressing global food the results, detailing the performance
crisis and avert extreme hunger of the phosphate giant until June 30,
for hundreds of millions of people 2022. The rise in income was attribu-
around the world”. To guarantee ted in part to the global rise in fertilizer
farmers’ access to chemical fertili- prices. With Russia and Ukraine being
zers, which are particularly lacking two of the largest fertilizer producers
for producers in West Africa, the and exporters in the world, the war
United Nations has signed a memo- between them has disrupted traditional
randum of understanding with the fertilizer markets and supply chains,
Russian Federation to supply the Being extremely dependent on phosphate fertilizers, Europe and Africa fear a food crisis while OCP has managed to increase
world market with agribusiness pro- in addition to the energy crisis due to the war in Ukraine production and exports while its inter-
ducts and Russian fertilizers. “If the of fertilizers, the kingdom finds In its latest report, Fitch argues that national competitors have struggled
fertilizer market is not stabilized, we itself with an unprecedented op- the increased phosphate rock forecasts to maintain production at pre-2022
could experience a food crisis next portunity. US ratings agency Fitch for 2022 and 2023 are due to OCP’s levels. A reduction in exports from
year”, said Secretary General Antó- Ratings last week announced an policy of limiting export to maintain China has also pushed up prices,
nio Guterres. In short, “the world upward price revision for fertilizer a price premium. The OCP policy affecting affordability and allowing
could run out of food”. prices upwards due to the continuing is especially effective as the group the Moroccan company to meet the
What about Morocco in all this? As supply constraints and the expected controls more than 70% of the world’s growing demand. o
one of the world’s largest exporters recovery in demand. phosphate rock reserves found in Mo- Abdessamad NAIMI
Friday 30 September 2022