Inflation is slowing in Morocco. So why do prices still feel high?

Morocco’s inflation is steadily returning to levels consistent with price stability, according to the latest forecasts from Bank Al-Maghrib, which expects average inflation to reach 1.5% in 2026 before edging up to 2.1% in 2027.

Figures from the High Commission for Planning (HCP) point in the same direction, showing a marked slowdown in price growth compared with the inflation spike of 2022 and 2023. Several food products have even recorded monthly price declines in recent months.

Yet for many Moroccans, those positive indicators have done little to change daily reality. Rising living costs remain the country’s biggest economic concern, with many consumers asking the same question: If inflation is falling, why aren’t prices?

Economists say the answer lies in a common misunderstanding: lower inflation does not mean lower prices.

Lower inflation does not mean prices are falling

While Bank Al-Maghrib’s forecasts suggest monetary policy has succeeded in containing the inflationary surge of recent years, they do not imply that prices have returned to previous levels.

Instead, lower inflation simply means prices are continuing to rise at a slower pace.

Ahmed Bouabid, an economist specializing in public finance, said there is no contradiction between the central bank’s projections and HCP data because each measures a different aspect of the same phenomenon.

“The central bank measures the success of monetary policy in reducing inflationary pressures, while the HCP reflects the level at which prices have stabilized after the sharp increases experienced over the past few years,” Bouabid told Hespress.

He said many people mistakenly assume that falling inflation automatically translates into cheaper goods.

“Inflation measures the rate at which prices increase—not the prices themselves,” he explained. “If inflation falls from 6% to 1.5%, prices are still rising, just much more slowly.”

For households, however, the comparison is rarely made against last year’s inflation rate. Instead, consumers compare today’s grocery bill, fuel costs and monthly expenses with what they were paying three or four years ago.

As a result, the steep increases recorded in food, fuel and service prices during 2022 and 2023 have become embedded in the overall price level, while the modest declines seen in some products have done little to offset those earlier increases.

“What Morocco is experiencing is disinflation—not deflation,” Bouabid said. “After major economic shocks, prices generally stabilize at a higher level rather than returning to where they were before.”

Why purchasing power still feels weak

Economists also note that slowing inflation alone is not enough to restore purchasing power.

Many wages and household incomes have failed to keep pace with the cumulative rise in prices over recent years, leaving families with less disposable income despite slower inflation.

Bouabid said the impact has been particularly severe for lower-income households.

“They devote a larger share of their budgets to food, transportation and energy—the very categories that experienced the largest price increases,” he said.

Although the prices of certain fruits and vegetables decline seasonally, he added, those savings are often outweighed by persistently high spending on housing, transportation, education and other essential services.

Restoring purchasing power, Bouabid argued, requires broader structural improvements, including stronger wage growth, higher productivity and increased competition to ensure lower production costs are reflected in retail prices.

He added that international experience shows consumers tend to remain pessimistic long after inflation subsides because memories of sharp price increases persist.

Average inflation doesn’t reflect every household’s experience

Another reason many Moroccans feel disconnected from official statistics is that inflation measures are based on a national average basket of goods and services.

In reality, spending patterns vary significantly depending on income, location and household composition.

Mohamed Yazidi Chafai, an economist at a Casablanca-based consulting firm, said each family effectively experiences its own inflation rate.

“The consumer price index reflects an average basket containing hundreds of products and services,” he said. “But every household has a different consumption basket, so inflation affects them differently.”

Lower-income families spend a much larger share of their income on food and transportation, meaning price increases in those categories weigh far more heavily than any declines elsewhere.

Chafai also pointed to regional disparities documented by the HCP, noting that inflation affects urban and rural areas differently, while households in regions where food represents a larger share of spending often feel price pressures more acutely.

Seasonal declines in agricultural products, he added, do little to alter the broader trend, as transportation, energy and service costs continue to strain household budgets.

“The central bank’s inflation outlook is certainly positive for the Moroccan economy,” Chafai said. “But it does not mean the effects of the cost-of-living crisis have disappeared.”

He argued that households will only begin to feel a meaningful improvement when lower inflation is accompanied by sustained income growth, stronger job creation and tangible gains in purchasing power.