HCP expects improved national economic growth, with a decline in inflation

HCP expects improved national economic growth, with a decline in inflation

A rise in the value added to the agriculture sector is predicted to help the national economy develop by an estimated 2.4% in the third quarter of 2023, according to the High Commission for Planning (HCP),

The overall inflation rate is expected to reach +4.7% during the third quarter of 2023, instead of +6.8% during the second quarter and 8.1% during the same period of the previous year.

The commission said that non-agricultural activities will continue to advance during the same period at the same growth rate of 2.4%, driven mainly by the dynamism of public services. 

Economic growth is expected to reach 2.6% during the fourth quarter of 2023, benefiting from the gradual recovery in domestic demand.

HCP also expected that the growth rate of consumer prices would rise at a slower pace during the third quarter of 2023, following the slowdown in global prices of raw materials, after reaching its peak during the first quarter of 2023, with an increase of 9.%.

The commission attributed the decline in the inflation rate to the continued decline in growth in the prices of non-food products, and the increase in the prices of food products at a lower rate.

Despite new rises in fuel prices over the summer of 2023, it is expected that the base year’s favorable impact will cause the contribution of energy products to the inflation rate to stay negative during the third quarter of 2023.

HCP anticipated that the prices of food products would stabilize at relatively high levels, contributing 3.9% to the overall inflation rate along with the increase in the cost of fresh goods, while the costs of manufactured goods and non-fresh food products would continue to decline as the pressure on the cost of food inputs eased.

 “It is expected that the agricultural value added will improve by 6% during the third quarter of 2023, instead of 6.3% during the previous quarter,” said HCP.

This is mainly attributed to the development of grain production by approximately 62% compared to 2022. 

While other crops are expected to witness a relative weakness in production, this will contribute to supporting the increase in the prices of fresh vegetables and fruits by 24.1% and 9.2%, during July and August 2023.

In the same light, red meat prices are likely to witness an increase of 15.7%, as livestock-raising activities are still affected by the ongoing droughts that have characterized recent years and resulted in increased production costs and a decrease in the supply of livestock destined for slaughter. 

This drove the rise in meat prices since the beginning of the year, which witnessed some slowdown as a result of the increase in imports of live livestock intended for consumption by approximately four-fold.

Except for red meat, the prices of other meat products, especially chicken, are expected to slow down, in parallel with a 10.4% increase in production. 

Milk prices, on the other hand, will stabilize as the rate of production declines, following the cessation of the depletion of dairy cows and the reduction in the costs of some feed. 

In parallel, the quantities of imported milk are likely to witness a decrease of 38.3% during July and August 2023.


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