Imported inflation behind surge of foodstuff, fuel prices in Morocco – Central Bank

Morocco’s central bank revised upwards its inflation figures for 2021 to 1.4% from 1.2% due in part to a surge in foodstuff and fuel prices in the international market.

Though inflation is expected to remain under control, the central bank said it plans an inflation targeting as it continues currency reforms, yet without giving a timeframe.

Inflation is expected to increase to 2.1 next year in a context of global post pandemic recovery.

The Central Bank’s growth forecast for 2021 was seen at 6.7% higher than previous estimates, and than the expectation of 6.3% set by the IMF.

Yet, in view of late rainfall and expectations of an average crop year in a context of pandemic uncertainties, the Bank said growth would drop to 2.9% next year and 3.4 in 2023.

Remittances by Moroccans abroad would grow to an all-time high of 95 billion dirhams or $10 billion making up for some of the losses in foreign currency inflow due to the staggering tourism sector.

Tourism receipts will further drop 9% to 33.7 billion dirhams this year, compared with 78 billion dirhams in 2019.

Central Bank governor said that these estimates hinge on the development of the health situation and that they can better be described as scenarios.

However, in view of the government’s foreign funding plans, foreign exchange reserves would remain at a comfortable level covering nearly 7 months of imports.

Foreign exchange reserves will thus increase from 330 billion dirhams this year to 341 billion next year.