Tuesday, December 17, 2013

Morocco holds rate, revises up 2014 inflation forecast

    Morocco's central bank held its policy rate steady at 3.0 percent and revised upwards its forecast for inflation in 2014 to 2.5 percent from September's forecast of 1.7 percent.
    But by the end of next year or in the first quarter of 2015, the Bank of Morocco said it expects inflation to ease to 2.0 percent. The forecast for inflation this year was revised down to 2.1 percent from 2.2 percent.
     The Bank of Morocco, which has held rates steady since March 2012, said inflation was forecast to average 2.3 percent over the entire forecast horizon. In October Morocco's inflation rate eased to 1.5 percent from 1.7 percent the previous month for 2.1 percent for the first 10 months.
    Morocco's Gross Domestic Product rose by an annual rate of 4.5 percent in the third quarter, down from 5.1 percent for 4.4 percent growth.
    For the second half, the central bank forecast growth of 5.0 percent, up from 4.4 percent in the first half, due to a sharp rise in the agricultural output and an improvement in non-agricultural activities.
    For 2013 the central bank forecast growth of between 4.5 and 5.0 percent, declining to 2.5-3.5 percent in 2014, "suggesting overall low pressure on prices in the short term," the bank said.
    Due to a 2.4 percent decline in imports, Morocco's trade deficit narrowed by 3.4 percent in October while exports fell 1.4 percent due to lower sales of phosphates and derivatives.
    The current account deficit is projected at 7.4 percent at the end of 2013 compared with a 10 percent deficit in 2012, the central bank added.



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