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The central bank of Morocco is revising its inflation forecasts upwards for 2022. It also forecasts a slowdown in economic growth suffering from a drought that is affecting agricultural production.
Inflation in Morocco should reach 5.3% this year against 4.7% initially forecast. Main reason for this increase, soaring energy prices and food prices, as well as the acceleration of inflation in the main trading partners of the country, underlines the central bank. Morocco is also facing an exceptional drought resulting in a significant decline in agricultural production, particularly cereals.
As a result, the country will experience a sharp slowdown in its economy, with agriculture being the primary economic sector. GDP should indeed reach 1% in 2022, three times less than forecast. In such a context of crisis and in order to avoid social protest, the government has doubled the budget devoted to subsidies for butane gas, flour and sugar to the tune of 2.8 billion euros. Subsidies were also granted to road hauliers following a strike action last March. Aid deemed insufficient by the unions in the face of the high cost of living.