Heba Press
The Bank of Morocco said headline inflation is expected to slow from 6.1 percent in 2023 to 1.3 percent in 2024, before accelerating to 2.5 percent in 2025.
The Central Bank confirmed, in a press release relating to the third quarterly meeting of its Board of Directors of the year 2024, that these results take into account in particular the changes announced in terms of subsidies for the prices of basic materials, and with the assumption of a medium-term evolution of volatile food prices.
According to the same source, inflation has been evolving at moderate levels since the beginning of the year, which mainly reflects the decline in volatile food prices and the slowdown in its basic component. After recording 5.6% in 2023, the latter oscillates around 2% and will remain, according to Bank Al-Maghrib’s expectations, close to this rate over the next eight quarters.
The Council also recorded a strengthening of expectations of stabilization of inflation, as indicated by the data of the quarterly survey of the Bank of Morocco among experts of the financial sector. It decreased in the third quarter of the current year to 2.2 percent for a horizon of 8 quarters and to 2.3 percent for a horizon of 12 quarters.
The Board noted that the economic and social outlook in the Bank’s macroeconomic outlook remains surrounded by a high level of uncertainty linked, at the international level, to the continuation of the war in Ukraine, the escalation of the conflict in the Middle East and the geopolitical tensions that are exacerbating the economic divide, which is not without consequences for the pace of activity and the evolution of prices, particularly energy prices.
At the national level, recurring periods of drought and water stress constitute an obstacle to agricultural production and economic growth as a whole. The implementation of the general orientations of the draft finance law for the year 2025, in addition to the continuation of negotiations within the framework of social dialogue, could also have more significant repercussions than expected on the evolution of demand and prices.
On the basis of all these data, the Council considered it appropriate to maintain the current monetary policy stance and therefore decided to keep the key interest rate unchanged at 2.75 per cent, while continuing to closely monitor developments in the economic and social situation.
