Morocco’s central bank keeps key rate on hold at 3% on subdued inflation

By bne IntelliNews March 26, 2014

Morocco’s central bank decided to maintain its benchmark interest rate unchanged at 3% as the CPI inflation forecast is consistent with the medium-term price stability objective and the balance of risks remains broadly neutral, the bank said in a statement.

The bank estimates that GDP growth will range between 4.5% and 5.0% in 2013 before slowing down to between 2.5% and 3.5% in 2014 due to falling agriculture output. The latter, however, will be partially offset by stronger output in the non-agro GDP growth (at 4%) despite the uncertainty surrounding non-market activities like construction and mining, the central bank underscored.

On the fiscal side, the budget gap increased to MAD 19.7bn at end-February 2014 from MAD 13.7bn the year before. For the full-year 2014, the budget deficit will narrow to 4.9% of GDP from 5.4% of GDP the year before. The current account gap will also narrow to 7.5% of GDP in 2014 from 7.8% of GDP in 2013, the central bank forecasts.

On inflation and given the government’s decision to liberalise energy prices, the CPI inflation is expected to average 1.8% in 2014 and 2.3% at the end of Q2 2015 before easing to 2.0%.

Related Articles

Trump warns US pullout from "horrible" Iran nuclear deal might still be ahead

US President Donald Trump on October 16 warned that the termination of the Iran nuclear deal is still a clear possibility even though he ... more

Pentagon chief suggests staying in Iran nuclear deal is in US interests

US Defence Secretary Jim Mattis on October 3 told the Senate Armed Services Committee that it currently appears to be in the strategic interest of Washington to remain in the Iran nuclear deal. ... more

Iran will in six years accept stricter nuclear inspections if US behaves, says foreign minister

Iran’s foreign minister has said the country is willing to formally accept a tougher nuclear inspection regime in six years. However, Mohammad Javad Zarif continued to rule out any renegotiation of ... more