Moroccan consumer price index drops in January as underlying inflation persists

The Consumer Price Index (CPI) dipped by 0.6% in January 20224, compared to the previous month, according to the High Comission for Planning.

This decline was driven by a 0.9% drop in food prices and a 0.3% decrease in non-food prices.

The fall in food prices was mainly attributed to a significant 9.6% drop in the “Vegetables” category. 

However, some food items saw price increases, including “Fish and seafood” (4.7%), “Fruits” (0.6%), “Coffee, tea, and cocoa” (0.4%), and “Meat” (0.3%). 

Similarly, non-food items like “Pharmaceuticals” saw a 4.9% decrease, while “Fuels” dropped by 2.4%.

Regionally, the largest declines in the CPI were observed in Oujda (1.0%), Casablanca (0.8%), and several other cities. Conversely, Laayoune saw a slight increase of 0.3%.

However, the positive news comes with a caveat, as a key inflation indicator paints a slightly different picture.

This indicator climbed by 0.3% in January compared to December and 2.9% year-over-year. This suggests that while overall prices may be slightly lower, core inflationary pressures remain present.

Moroccan consumers saw a welcome decline in inflation throughout 2023, culminating in a December 2023 price drop of 0.1% compared to November. 

This final decrease contributed to an overall 6.1% inflation rate for the year, marking a significant improvement from the 6.6% inflation recorded in 2022. 

This positive trend suggests improved stability in Morocco’s economy and potentially increased purchasing power for its citizens.

The International Monetary Fund (IMF) acknowledged the country’s economic resilience and stability, predicting a gradual decline in inflation, fueled by easing pressure on commodity and food prices. 

Projections suggest a drop to 2% over the next few years, according to the IMF which recommended maintaining the current monetary policy stance as inflation falls. 

Additionally, the IMF urged Bank Al-Maghrib to resume its transition towards an inflation-targeting framework as the situation continues to improve.