Central Bank’s Study Tracks Morocco’s Inflation Drivers

Moroccan Central Bank (Bank Al-Maghrib) published a working paper examining the main drivers of inflation in Morocco over the past decade.
The document highlighted that since the 2007 international financial crisis, Morocco has experienced moderate inflation, along with weak economic activity and decreasing interest rates. As of 2022 onward, this situation will begin to change, with a steady rise in inflation amidst intense pressure on commodities prices and global geopolitical tensions.
The study also pointed out that the results are partially due to the progressive liberalization of energy prices linked to the Subsidies Fund reform.
Imported inflation shocks, reflecting mainly commodity price movements, significantly impacted inflation in Morocco. The national economy’s dependence on energy exposes it directly to price variations on international markets. Also, since this shock also reflects inflation among key partners, the impact on Moroccan prices would also be due to increased prices for imported intermediate or finished goods.
The study showed that, by the end of 2021, inflation has gradually moved from moderate rates to unprecedented levels. This new price dynamic is the consequence of a combination of different factors. Geopolitical tensions caused by the war in Ukraine have significantly impacted the price of commodities and foodstuffs.
Additional elements have worsened the impact of these tensions, such as drought, disruptions in global supply chains, the protectionist policies that some countries have adopted to counter the risk of shortages, and the sanctions imposed on Russia.