Morocco – Bank Al-Maghrib, Morocco’s central bank, announced on Tuesday that it will keep interest rates unchanged at 1.5%.
The decision to leave the interest rate unchanged came during a bank board meeting and stands as a benchmark for other banks and investors to use when setting their own interest rates.
The unchanged interest rates aim to “support economic activity and mitigate the impact of the adverse international environment,” the bank said in a statement, pointing to an increase in prices worldwide, driven by a hike in global fuel, fertilizers, and grain prices.
During their first quarterly meeting in 2022, the board noted that the global surge in energy and food prices is behind inflation.
The bank noted that this year’s drought will cause a significant drop in Morocco’s cereal production.
Cereal production is expected to drop by 75% to around 25 million quintals in 2022, down from 103.2 million quintals in 2021, the statement said.
Regarding the non-agriculture sector, economic activities will continue to recover with annual growth averaging 3% throughout 2022 and 2023 thanks to Morocco’s robust vaccination campaign and the easing of COVID restrictions.
After a national 2021 economic rebound, growth is expected to slow due to Russia’s invasion of Ukraine which is likely to continue affecting global food prices and oil prices.
Economic growth will shrink in all major economies in 2022, with economic growth projected to average 3.4% in the United States, down from 5.7% the year before, the BAM statement points out.
The Euro Zone will also feel the heat of the conflict as economic growth is set to slow to 3.5% in 2022 and to 1.7% in 2023, BAM added.
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