The macroeconomics research company Fitch Solutions predicts that less growth in oil and food prices will limit Morocco’s 2019 inflation rate.
Rabat – Fitch Solutions Macro Research published a report on their website on Monday, predicting a decrease in Morocco’s average inflation rate for 2019 from 1.3% to 1.1%. The new outlook reflects “sluggish oil and food price growth”
Fitch said “poor outlook for food prices is adding to the downward pressure on inflation – our Commodities team is now forecasting wheat prices to fall in 2019 below average.”
Fitch Solutions, formerly BMI Research, is a leading provider of credit, debit, and macroeconomics intelligence solutions.
The group expects that “subdued inflation and a neutral shift in US Fed policy will likely prompt the Bank Al-Maghrib (BAM) to hold its key policy rate at 2.25% in 2019.”
Fitch predicts that BAM “will sustain its current interest rate differential with the ECB, implying one 25 basis point hike in 2020.” BAM would sustain the rate in order “to protect foreign exchange reserves and limit imported inflation.”
In January the group published a report titled “Economic Analysis – Continued Gradual Fiscal Consolidation Ahead In Morocco,” which predicted that Morocco’s fiscal deficit would shrink throughout 2019 and 2020.
