Morocco’s central bank continued to keep its monetary policy rate at 2.25 percent, unchanged since March 2016, saying underlying inflation remains moderate despite the recent rise in headline inflation which is based on changes to the consumer price index along with higher prices of volatile food products and tariffs on regulated prices.
Underlying inflation is forecast to average 1.1 percent this year and 1.6 percent in 2019, the Bank of Morocco, or Bank Al-Maghrib (BAM), said. This forecast is down from March when BAM forecast 2018 underlying inflation of 1.4 percent and 1.9 percent in 2019.
Morocco’s headline inflation rate rose to 2.7 percent in May from 2.5 percent in April and BAM expects inflation to average 2.4 percent this year and then ease to 1.4 percent in 2019.
The forecast for 2018 headline inflation is sharply up from the previous forecast in March of 1.8 percent while the 2019 forecast is largely similar to the previous 1.5 percent forecast.
After slowing in 2016, Morocco’s economy recovered last year and is forecast.