Morocco’s core inflation eased to an annual rate of 2.1% in July, down from 2.4% in June, according to data released Monday by the High Commission for Planning (HCP).
The deceleration reflects an ongoing stabilization of the country’s inflation, which has been edging closer to the central bank’s target of 2%.
The Consumer Price Index (CPI), a key gauge of the cost of goods and services, fell by 0.2% in July compared to the previous month.
A 0.5% drop in food prices, although partially offset by a modest 0.1% increase in non-food items, was the primary driver of the lower CPI.
Inflation in Morocco has faced considerable upward pressure over the past two years due to both external and domestic factors.
Global supply chain disruptions caused by the COVID-19 pandemic, exacerbated by the war in Ukraine, triggered a surge in consumer prices.
Domestically, a persistent drought has further strained the agricultural sector, pushing up prices of key staples like vegetables, fruits, and meat.
Morocco’s inflation peaked at 10% in February 2023, fueled by skyrocketing food prices.
In response, the country’s central bank, Bank Al-Maghrib (BAM), raised the benchmark interest rate from 1.5% to 3% over the course of several tightening cycles. Recently, however, BAM eased up slightly, trimming the rate by 25 basis points as inflationary pressures began to recede.
Despite the recent easing, BAM cautioned that external risks remain. The ongoing conflict in Ukraine and instability in the Middle East are likely to continue weighing on global supply chains, with inflation expected to hover around 2.7% in 2025.
The central bank has also pointed to the Moroccan government’s gradual removal of subsidies on basic foodstuffs and energy as a factor that could further ease inflation in the coming years.