Morocco’s core inflation rate rose to 2.6% year-on-year in August 2024, driven largely by a 1.8% increase in food prices, according to data from the Higher Commission for Planning (HCP).
The latest figure represents a modest uptick from the 2.1% recorded in July, edging away from the central bank’s target of 2%.
The broader Consumer Price Index (CPI), a key measure of price growth across goods and services, also rose by 0.8%, after a 0.2% drop the previous month.
Inflationary pressures in Morocco have been on an upward trajectory for the past two years, fueled by both global and domestic challenges. Global supply chain disruptions—initially triggered by the COVID-19 pandemic and worsened by the war in Ukraine—have spurred a rise in consumer prices across the board.
Domestically, persistent drought conditions have severely impacted Morocco’s agricultural output, driving up the cost of staples such as vegetables, fruit, and meat.
The inflationary peak occurred in February 2023, when headline inflation reached 10%, driven primarily by soaring food prices.
In response, Bank Al-Maghrib (BAM) implemented a series of aggressive rate hikes, raising its benchmark interest rate from 1.5% to 3% to tame inflationary pressures. More recently, as inflation showed signs of easing, BAM relaxed its policy and lowered the rate by 25 basis points.
Despite the central bank’s recent move, external risks remain high. The conflict in Ukraine, along with instability in the Middle East, continues to pose threats to global supply chains. BAM expects inflation to remain around 2.7% through 2025, due to the persistent geopolitical risks.
The gradual removal of subsidies on basic food and energy commodities is anticipated to provide additional downward pressure on price growth going forward.