It was expected. Bank Al-Maghrib has revised its growth forecasts for 2022 downwards. Under the effect of unfavorable weather conditions and a difficult economic situation, agricultural value added is expected to plummet by 19.8% this year. This would bring economic growth down to 0.7%, once morest the 2.9% projected during the council held in December 2021. In 2023, assuming an average harvest of 75 million quintals, the agricultural value added should rise by 17%, bringing growth to 4.6%, once morest 3.4% predicted by the institution last December.
Bank Al-Maghrib (BAM) is revising its growth projections for 2022 and 2023. Following its Board meeting on March 22, the Issuing Institution, which kept its key rate unchanged at 1.5%, estimates that in view of the particularly unfavorable climatic conditions, the agricultural campaign should show a cereal production of around 25 million quintals this year, and this following 103.2 million in 2021. Thus, the agricultural value added would fall by 19.8%. As a result, economic growth would return to 0.7% in 2022 ( once morest the 2.9% projected at the Council meeting in December 2021), following a rebound which would have reached 7.3% in 2021. In 2023, under the Assuming an average harvest of 75 million quintals, the agricultural value added should rise by 17%, bringing growth to 4.6% ( once morest 3.4% forecast by the institution last December). As for non-agricultural activities, BAM expects their gradual consolidation, with a 3% increase in their added value in 2022 and 2023.
4.7% inflation this year
In its analysis of the international environment, marked in particular by the war in Ukraine, the Board of BAM stresses the “extremely high” level of uncertainty surrounding the macroeconomic projections drawn up by the Bank. The latter show, in fact, a significant drop in the agricultural value added as well as a certain consolidation of non-agricultural activities, favored by the notable progress of the vaccination campaign, the easing of sanitary restrictions, as well as the maintenance monetary stimulus and sectoral support measures. The Central Bank’s forecasts are also counting on a sharp acceleration in inflation this year in parallel with the relative resilience of external balances and public finances. In concrete terms, the Board recalled that inflation is continuing to accelerate, which began in 2021, driven by external pressures linked to the surge in the prices of energy and food products and the rise in inflation in the main economic partners. Thus, following a rate of 1.4% in 2021, inflation should stand at 4.7% in 2022 before returning to 1.9% in 2023. Similarly, its underlying component would increase by 1.7% to 4.7% then decelerate to 2.6%.
The current account deficit would sink to 5.5% of GDP
Soaring commodity prices will worsen the current account deficit this year. The latter would suddenly widen to 5.5% of GDP in 2022 following 2.6% in 2021, before returning to 3.7% in 2023. In this table, imports would show an increase of 14.9% this year , following the increase in the energy bill and the increase in the purchase of agricultural and food products and consumer goods. In 2023, the increase would be limited to 1.1%, notably due to the planned reduction in the energy bill. At the same time, exports should improve by 12.5% in 2022 and 3.4% in 2023, driven mainly by the increase in sales of automobile construction and those of phosphates and derivatives in 2022. While remaining at levels below pre-crisis levels, travel receipts would experience a gradual recovery, rising from 34.3 billion dirhams in 2021 to 47 billion this year and 70.9 billion the following year. Transfers from Moroccans residing abroad (MRE) should gradually return to their pre-crisis level, at 79.3 billion in 2022 and 70.8 billion in 2023, following a level deemed “exceptional of 93.3 billion in 2021. With regard to direct investments abroad (FDI), their receipts would be around the equivalent of 3% of GDP in 2022 and 3.5% in 2023. In total, and taking into account in particular planned external financing of the Treasury, official reserve assets would stand at 342.8 billion dirhams at the end of 2022 and 347.3 billion at the end of 2023, thus providing coverage for around 6.5 months of imports of goods and services .
Moderate growth in bank credit
Bank credit to the non-financial sector should maintain a moderate growth rate of around 4% this year and in 2023. On the public finance side, despite the significant increase in compensation expenditure for butane gas and wheat, BAM predicts a near -stability of the budget deficit. It should thus stand at 6.3% of GDP in 2022, thanks to an exceptional mobilization of resources through, in particular, specific financing mechanisms and revenue from monopolies. In 2023, it should ease to 5.9% of GDP, mainly as a result of the expected improvement in tax receipts. Regarding monetary conditions, the Central Bank expects a depreciation of the real effective exchange rate of 1.3% in 2022 and 2023, under the effect of a level of domestic inflation lower than that of partners and competitors. commercial. Lending rates, for their part, increased by 9 basis points to 4.44% on average in the fourth quarter of 2021, but fell by 16 points over the whole of 2021 following the decline of 45 points observed. in 2020. For its part, banks’ need for liquidity eased to 69.9 billion dirhams on average weekly in the fourth quarter in connection with the increase in foreign exchange reserves, but should increase to 75.1 billion in 2022 and 88.3 billion at the end of 2023, driven by growth in cash.
