Morocco’s central bank revises its inflation forecasts upwards for 2022. It also predicts a slowdown in economic growth, which is suffering from a drought affecting agricultural production.
Inflation in Morocco should reach 5.3% this year against 4.7% originally estimated, according to forecasts by Bank Al-Maghrib (BAM), the Moroccan central bank. In question, the sky-high prices of energy and food as well as the acceleration of inflation in the country’s most important trading partner, the central bank emphasizes.
Morocco is also facing an exceptional drought which results in a significant reduction in agricultural production, especially cereals. Result: the country will experience a sharp decline in its economy, and agriculture is the first economic sector in the country. GDP should certainly not exceed 1% in 2022, ie three times less than the forecast.
In such a crisis situation and to avoid social protests, the government has doubled the budget for subsidies for butane, flour and sugar to 2.8 billion euros. Subsidies were also granted to road transport companies after a strike in March last year.
But the aid is considered insufficient by the unions in the face of the high cost of living. Morocco has for several months been facing continuous price increases, especially on hydrocarbons, a consequence of the war in Ukraine in particular.