By www.CentralBankNews.info Morocco’s central bank kept its policy rate unchanged at 3.0 percent and expects inflation to average 1.7 percent over the next 1-1/2 years, in line with the bank’s price stability objective.
Bank Al-Maghrib, which has held its rate steady since March when it was cut by 25 basis points, said headline inflation should hover around 1.2 percent in 2012, 1.7 percent in 2013 and 1.5 percent in the first quarter of 2014.
“In this context where the balance of risks is neutral and the central inflation forecast is permanently consistent with the price stability objective, the Board decided to keep the rate unchanged at 3 percent,” the central bank said in a statement, repeating its statement from September.
Morocco’s headline inflation rate rose to 1.8 percent in October from September’s 1.2 percent, but the bank said this was mainly due to a 5 percent rise in volatile food prices. Core inflation rose to 0.8 percent in October from 0.6 percent.
Morocco’s Gross Domestic Product expanded by an annual 2.3 percent in the second quarter for first-half growth of 2.6 percent and the bank said 2012 growth was expected to remain below 3 percent, the same forecast as in September.
Next year, the central bank forecasts that the country’s economy should expand between 4 and 5 percent under the assumption of average cereal production and “persistent unfavorable global economic outlook.”
Morocco’s government has forecast the economy would expand by 4.5 percent in 2013.
Money creation in Morocco continued to moderate at the end of October, the bank said, with money supply up an annual 3.6 percent, down from 4.4 percent in the previous quarter, and credit growth down to 5.4 percent from 6.3 percent.
“Under these circumstances, the money gap is expected to remain negative, suggesting the absence of monetary inflationary pressures,” the central bank said.
Morocco’s economy is dependent on tourism and exports to Europe. Transfers from some 2 million migrants living abroad shrank by 4 percent to the end of November and travel receipts fell by 2.3 percent, the bank said.
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