Rabat – Abdellatif Jouahri, the governor of Bank Al-Maghrib (BAM), said that Morocco is not experiencing stagflation – a combination of low or zero economic growth – at the same time as a sharp rise in prices.
However, Morocco is experiencing imported inflation due to an increase in the cost of products shipped in from outside the north African country, Jouahri said in a press release that followed a bank meeting.
He said that the Consumer Price Index (CPI) should be updated more frequently to reflect the impact of imported inflation in 2022.
Jouhari said the Bank’s monetary policy – through which it sets interest rates – is being hampered by slow economic growth as a result of the decline in agriculture production due to low rainfall in 2022.
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The Bank said that its interest rate will remain at 1.5%, and inflation should slow down in 2023.
But he added that 2022 is riddled with economic uncertainty due to the global events that are currently at play, such as Russia’s invasion of Ukraine.
The crisis in Ukraine impacted not only financial markets, but also commodity prices and trade, as well as economic activities and investments. The impact can be noticed with the rise of oil, when it exceeded $115 (MAD 1,116) per barrel last week.
The COVID-19 Omicron variant spread rapidly across the world since it first appeared in South Africa in November 2021. Although it was less dangerous, the swiftness in which it spread left experts at the World Health Organization (WHO) worried that it could lead to the mutation of more dangerous virus variants. This disrupted financial markets and stock exchanges worldwide.
All of this contributes to making a tense global situation, in which estimating the rise or the decline of inflation is a difficult task, Jouahri said.
He added that BAM will make all precautions to monitor the economic and financial situation in the country, regularly updating its forecasts and estimates.
