The Bank of Morocco, which cut its rate by 50 basis points in 2014, added that the country's economy was expected to expand by 5.0 percent in 2015, higher than its previous 4.4 percent forecast, from 2.5 percent last year due to good crops and a continued improvement in the non-agricultural sector.
The inflation forecast for 2015 is slightly higher than the central bank's forecast in December when it forecast 1.2 percent inflation and 1.3 percent in the first quarter of 2016.
Morocco's consumer price inflation rate eased to 1.3 percent in February from 1.6 percent in January for an average of 1.5 percent in the first two months, up from 0.4 percent 2014.
However, the central bank added that the downward trend in industrial producer prices, which started in January 20134, had intensified in recent months, with prices falling by 6.4 percent in January as compared with an average decline of 2.9 percent in 2014.
Last month news agencies reported that Morocco's government was proposing a draft law that would give the central bank more independence at a time that the country is preparing allow Islamic banks to be set up and increase the flexibility of its exchange rate system by allowing the use of foreign exchange reserves to defend the dirham so it can better absorb external shocks.
The Bank of Morocco issued the following statement:
"1. The Board of Bank Al-Maghrib
2. At this meeting, the Board examined recent economic, monetary and financial developments and inflation forecasts up to the second quarter of 2016.
3. At the international level, the Board noted that the euro area improved slightly economy continued to grow strongly, compared to 2.7 percent in the third particularly in the United States Unemployment rate in the euro area reached previous month. In the main emerging India, while Brazil’s third quarter European Central Bank (ECB) 0.5 point to 1.5 percent for 2015 and by 0.4 point to 1.9 percent for 2016. the Federal Reserve slightly lowered percent for 2015 and 2016. In level of June 2014, despite their decrease in February to remain slightly below $60 a euro area eased from -0.6 percent to States was slightly negative in January after monetary policy decisions, the ECB start its new larger purchase program maintained the federal funds rate forward guidance, indicating that an increase in the target range remains unlikely at meeting. Overall, the low levels of growth and inflation ’s main trading partner, coupled with the downward trend in oil prices, indicate the absence of external inflationary pressures.
4. For the full year 2014, GDP growth would remain around 2.5 percent and available data show that it would reach 5.0 percent in 2015, driven by continued recovery in nonagricultural agricultural value added. In the labor market, the unemployment rate in the third quarter was up 0.5 percentage point year on year to 9.6 percent, despite a 0.3 decrease in the labor force participation rate. Altogether, nonagricultural output gap negative, suggesting the absence of demand-led inflationary pressures.