Morocco’s Inflation Nears Annual Target 2% in June 2024

After going haywire over the past two years, inflation in Morocco is stabilizing, growing at an annualized rate of 2.4% at the end of June 2024.

Rabat – After going haywire over the past two years, inflation in Morocco is stabilizing, growing at an annualized rate of 2.4% at the end of June 2024.

The spillover from the COVID-19 pandemic has caused a significant spike in inflation in Morocco and around the world, with the Ukraine war further compounding the issue.

Since November 2022, inflation in Morocco has taken an upward trajectory, reaching a peak of 10% in February 2023, propelled by skyrocketing food prices.

In a bid to tame inflation, Morocco’s central bank, Bank Al-Maghrib (BAM), hiked the benchmark interest rates from 1.5% to 3%, before reducing it by 25 basis points last month.

Beyond the exterior pressure on the supply chain, the persistent drought strained market supply and caused vegetable, fruit, and meat prices to reach record-high levels.

Food and energy prices continue to weigh down on inflation, with the highest rise in prices recorded in gas at 10%. The second-highest increase was recorded in fruits at 4.5%, followed by meat at 2.2%, according to a report from the High Commission of Planning (HCP).

Looking ahead, BAM said that the ongoing conflict in Ukraine and the fallout from the Middle East crisis will continue to negatively influence inflation, with the rate projected to peak at 2.7% in 2025.

However, the bank maintained that the government’s gradual lifting of subsidies on basic food and energy commodities is expected to further reduce inflation.