Advice from Bank Al-Maghrib Barely 2.1% growth this year
Unsurprisingly, the central bank has opted for the status quo. The key interest rate remains unchanged at 3%. The decision made by the Board of the Central Bank (Bank Al-Maghrib), which met on Tuesday March 19, is based on a number of factors. In its analysis of economic trends and medium-term macroeconomic projections, the Bank speaks of the overall resilience of the global economy in 2023.
At the national level, after the slowdown in 2023, non-agricultural growth should gradually improve. It will be boosted in particular by public investment. The rate of growth in non-agricultural activities is set to rise from 2.6% in 2023 to 3% in 2024, before rising to 3.5% in 2025, driven by the expected investment momentum in connection with the various projects underway and planned. On the other hand, agricultural production continues to suffer from the effects of recurrent droughts and increasing water stress. The start of the agricultural season was marked by unfavorable weather conditions, with low rainfall and uneven territorial and temporal distribution, which affected the area planted with cereals. The area sown with cereals was around 2.5 million hectares, compared with nearly 3.7 million hectares a year earlier. According to Bank Al-Maghrib, cereal production stood at around 25 million quintals, compared with 55.1 million quintals a year earlier. «Against this backdrop, agricultural value added is projected to shrink by 6.4% in 2024, before rebounding by 12.8% in 2025, assuming a return to an average cereal harvest of 55 million quintals». All in all, economic growth, estimated at nearly 3% in 2023, should be limited to 2.1% in 2024, before accelerating to 4.3% in 2025.
As for inflation, a return to «calm» has been noted for the time being. After peaking at 10.1% in February 2023, it fell to 3.4% in December. Inflation ended 2023 at 6.1%, compared with 6.6% a year earlier. The central bank expects it to slow to 2.2% this year and 2.4% in 2025. « Its underlying component has followed a similar trajectory, falling from 6.6% in 2022 to 5.6% in 2023, and is expected to hover around 2.3% this year and in 2025 «, Bank Al-Maghrib’s Board points out.
Another factor behind the maintenance of the status quo is the high level of uncertainty surrounding the economic outlook and the evolution of inflation, linked at the international level to geopolitical tensions and to the holding of elections in many countries. At the national level, it is above all climatic conditions and water stress that are highlighted by the Board.
Khadija MASMOUDI
