Growth, key rate, foreign trade… Bank Al-Maghrib delivers its short-term macroeconomic projections

Growth, key rate, foreign trade… Bank Al-Maghrib delivers its short-term macroeconomic projections
Growth, key rate, foreign trade… Bank Al-Maghrib delivers its short-term macroeconomic projections

Growth should consolidate at 3% in 2022, covering a decline of 3.3% in agricultural value added, under the assumption of a return to average cereal production, and a 3.6% increase in that of activities. non-agricultural.

The Moroccan economy is moving in the right direction. According to the Board of Bank Al-Maghrib which held its 3rd quarterly session on Wednesday, October 13, 2021, the recovery is expected to continue. During this meeting, he analyzed in the light of the evolution of the health situation the economic situation at the national and international levels while revealing the medium-term macroeconomic projections of the Bank. In this perspective, the said Council emphasized the significant progress made by our country in terms of vaccination and the development of inflation at moderate levels despite a certain increase in external inflationary pressures. In the same vein, the Council analyzed the latest developments on the foreign exchange market and deciphered the impact of recent Bank interventions to absorb cyclical currency surpluses.

The key rate maintained at 1.5%

For the Board of Bank Al-Maghrib, the stance of monetary policy “remains largely accommodative, ensuring adequate financing conditions”. In particular, he considered that the current level of the key rate remains appropriate. To this end, the Board decided to keep it unchanged at 1.5%.

Inflation will settle at 1.6% in 2022

After a relative acceleration of 1.6% on average recorded in the second quarter of 2021 and of 2.2% in July, inflation returned to 0.8% in August due to the fall in the prices of priced food products. volatile. The Council also underlined that in a context marked “by the increase in the price of energy products, the recovery of domestic demand and the accentuation of imported inflation, it should stand at 1.2% for the whole of this year and to settle at 1.6% in 2022 and this, after a rate of 0.7% in 2020 ”adding that its underlying component should go from 0.5% on average in 2020 to 1.4% in 2021 and would reach 2.1% in 2022.

The recovery continues

Growth should consolidate at 3% in 2022, covering a decline of 3.3% in agricultural value added, under the assumption of a return to average cereal production, and a 3.6% increase in that of activities. non-agricultural. In its analysis, the Board of Bank Al-Maghrib recalls the latest national accounts data relating to the second quarter of 2021 which indicate a growth of 15.2% of the national economy, year-on-year, with increases of 18.6% agricultural value added and 14.8% of that of non-agricultural activities. “The recovery is expected to continue, supported by the notable progress of the vaccination campaign, the very good agricultural season, the fiscal stimulus as well as the accommodative stance of monetary policy.
Thus, according to the updated projections of Bank Al-Maghrib, the GDP in real terms would end the year with a rebound of 6.2%, upward revision of 0.9 point compared to the forecasts of last June ”, notes the same source adding that this improvement reflects an 18.8% increase in agricultural value added, given a cereal harvest of 103.2 million quintals, and a 4.6% increase in the non-agricultural one.

Insufficient job creation

There are 405,000 jobs created in the labor market in the second quarter of 2021 (year-on-year). This number remains below the 533,000 assets who joined the market during the same period, argues the same source. As a result, the participation rate increased by 1.3 points to 46.1%, while the unemployment rate worsened by 0.5 points to 12.8%.

Acceleration of the resumption of foreign trade

As for foreign trade, data at the end of August point to a general acceleration in the recovery in trade in goods. “This dynamic should continue with an increase in exports of 22.6% in 2021 and then 5.9% in 2022, mainly driven by sales of phosphate and derivatives and automotive construction. At the same time, imports should increase by 19.6% in 2021, mainly reflecting the expected increases in purchases of capital and consumer goods, as well as the increase in the energy bill, before showing a deceleration in their consumption. rate of 4% in 2022 ”, explains the Council. On another aspect, health restrictions continue to weigh on travel receipts with a further drop of 8.6%, to 33.3 billion dirhams, expected in 2021 after that of 53.7% in 2020. “In 2022, under the assumption of a significant reduction in these measures, these revenues would rebound to 60.7 billion, a level which remains however well below that of 78.7 billion recorded in 2019 ”, according to the same source.
MRE transfers:

A record of 87 billion dirhams expected in 2021

MRE transfers for their part would show a significant increase of 27.7% in 2021 to reach a record 87 billion dirhams, before falling by 5%, to 82.7 billion in 2022. “Under these conditions, the deficit of the current account would widen from 1.5% of GDP in 2020 to 2.5% in 2021 before falling to 1.4% in 2022 ”, underline the experts of Bank Al-Maghrib.
As for foreign direct investment flows, they should oscillate around the equivalent of 3% of GDP over the forecast horizon. “Taking into account, in particular, the planned external financing of the Treasury and the allocation of SDRs of 10.8 billion dirhams, official reserve assets would stand at 335 billion dirhams at the end of 2021 and 345.1 billion at end of 2022, that is to say the equivalent of more than 7 months of imports of goods and services ”, notes the same source.

The expected exchange rate up 0.4% at the end of 2021

Regarding monetary conditions, “the real effective exchange rate should end the year with an increase of 0.4%, the result of the nominal appreciation of the dirham and a national inflation level lower than that of partners and competitors. », Affirms the Board of Bank Al-Maghrib.
In 2022, it should depreciate by 1.9% in connection with the decline in the nominal value of the national currency. As for lending rates, they experienced a quarterly decline of 13 basis points in the second quarter, which mainly benefited companies.
With regard to bank credit to the non-financial sector, its growth slowed slightly to 3.3% in the second quarter, reflecting in particular the deceleration in loans granted to private non-financial companies after the end of certain support programs implemented. place in 2020 as part of the response to the Covid-19 crisis. It should end this year with an increase of 3.7% then increase by 3.8% in 2022, specifies the same source.

 
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