Gulf Daily News
RABAT: Morocco’s central bank held its benchmark interest rate at three per cent yesterday, forecasting inflation would be above its average of recent years but would stay in line with its price stability objective in the medium term.
“Taking into account the expected level of international oil prices and the subsidy expenditures set in the Finance Bill 2014, inflation is projected at 2.1pc in 2013, 2.5pc in 2014,” the central bank said in a statement.
The Moroccan government began to index oil prices partly to international levels in September to reduce its subsidies and meet international lenders’ requirements.
For the January-October period, subsidies fell by 22.4pc compared with last year to 35.6 billion dirhams after energy prices dropped in the international market.
The central bank said the budget deficit should be around 5.5pc of GDP this year as a result of the drop in subsidy costs, efforts to control expenses and the collection of donations.
The central bank expects the economy to grow 4.5 to 5pc in 2013 and 3.5 to 4.5pc in 2014 based on a medium-sized agricultural harvest. The bank said the current account deficit is likely to narrow to 7.4pc of GDP in 2013 from 10pc in 2012, and the stock of net international reserves would reach 145.5bn dirhams ($17.80bn) or the equivalent of four months of goods and services imports by the end of the year, the bank said.
