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Morocco's Inflation Stabilizes Amidst Economic Headwinds
Despite the challenges, the report noted that the risks of runaway inflation have diminished, with Morocco maintaining a relatively stable economy compared to other countries facing similar pressures.
Morocco has managed to avoid a wage-price spiral despite the persistent inflationary pressures in 2023, according to the latest annual report from the country’s Competition Council.
The report highlighted the phenomenon of “cupidflation” – greedflation in English – where some companies have taken advantage of inflation to unjustifiably increase their profit margins by more than their costs have risen.
In 2023, inflation in Morocco averaged 6.1%, slightly down from 6.6% in 2022, with a peak of 10.1% recorded in February. By December, inflation had eased to 3.4%. The report also noted a decline in the underlying inflation rate, which excludes volatile prices, averaging 5.6% for the year.
Food prices were identified as the main driver of inflation, with significant increases seen in categories like vegetables (28.6%), fruits (27.1%), dairy products, and eggs (13.3%). These spikes were partly offset by a reduction in fuel prices and stable prices in regulated goods.
The Competition Council raised concerns about the behavior of companies with market power, which may have exploited the inflationary environment to increase prices and margins beyond what was justified by external factors.
Despite the challenges, the report noted that the risks of runaway inflation have diminished, with Morocco maintaining a relatively stable economic environment compared to other countries facing similar pressures. The slight uptick in household consumption, coupled with rising unemployment and weakened purchasing power, has played a role in curbing further inflationary escalation.
The report also points to the need for continued vigilance and policy measures to sustain this trend, emphasizing that competitive market conditions are crucial for long-term inflation control.