The Bank al Maghrib announced on Tuesday afternoon after its quarterly board meeting that the interest rates applied from the institution will rise by 2%. The measure of the Moroccan central bank aims to curb inflation in Morocco as a result of the global economic crisis following the Russian invasion of Ukraine.
The Moroccan central bank's forecasts announce an acceleration in the growth of inflation, which will reach 6.3% in the last part of 2022, before falling back to 2.4% in 2023 if the Bank al Maghrib's measures take effect. In 2021, Moroccan inflation stood at only 1.4%. It reached its worst figures of 8% in August.
The Moroccan central bank blames higher energy prices, the effects of the pandemic and drought for the necessary rise in interest rates. The rise to 2% implies a slowdown in economic growth and domestic investment. Specifically, the Moroccan bank's note reports a sharp slowdown in economic growth to 0.8%, the result of a 14.7% slowdown in the agricultural sector and a 3.4% slowdown in other economic activities.
By 2023, the forecast is for a 3.6% acceleration in economic growth thanks to an 11.9% recovery in the value added of Morocco's agricultural activity. This will depend on meeting the average cereal production estimate of 75 million quintals (0.1 tonnes). Non-agricultural activities are not expected to grow, falling to 2.5% in 2023.
International trade is saving Morocco from the economic abyss. Exports are forecast to grow by 34%. The central bank's communication highlights the foreign sale of phosphates and their derivatives, which, according to the bank's estimates, will bring in around 144.5 billion euros for Morocco's coffers. The bank estimates, however, that exports will fall slightly by 1.1% by 2023.
Finally, the central bank approves the budgetary and fiscal management of Aziz Akhannouch's government, almost a year after the appointment of his cabinet. It highlights a 24.5% improvement in state tax revenues, despite a 13.1% increase in public spending. The budget deficit fell from 5.9% to 5.5% from 2021 to 2022 and should fall to 5% by 2023.