Morocco gradually curbs inflation, key forecasts and policies

Morocco is gradually addressing inflation, a major political and public debate issue since 2021, when inflation exceeded 6%. Public institutions are intensifying efforts to reduce inflation to zero.

The African Development Bank predicts a fiscal deficit contraction to 4.4% of GDP and significant inflation declines in 2024 and 2025, attributing these forecasts to lower global basic material prices.

This aligns with reports from other national and international economic institutions. For instance, Bank Al Maghreb expects inflation to stabilize at 2.2% in 2024.

Head of government Aziz Akhannouch recently reported that Morocco has reduced inflation to 1.2%, a figure supported by the High Commission for Planning’s observations of inflation stability.

Zakaria Verano, an economist at Mohammed V University in Rabat, noted that the African Development Bank’s forecast is corroborated by national institutions, including the High Commission for Planning, which anticipates declining inflation due to falling global basic material prices, as measured by the FAO index.

Verano highlighted the decline in energy prices, with international petroleum organizations projecting annual averages not exceeding $85, and the managed impact of global issues like the Red Sea crisis and the Ukraine-Russia conflict.

Verano also praised Morocco’s monetary policy, particularly the interest rate hikes at the end of 2022 and the beginning of 2023, which contributed to the inflation decline. Additionally, financial policies supporting various sectors have played a role.

Conversely, economic analyst Rachid Sari questioned the link between lower inflation and global food prices, citing ongoing constraints like the Middle East crisis and drought conditions affecting global food prices.

While Morocco’s overall inflation remains low, agricultural inflation is still high, and national fuel prices, though stable, are higher than before. Sari emphasized the importance of a comprehensive view beyond food prices, noting that the Bank of Morocco’s insights are more aligned with national circumstances than the African Development Bank’s projections.