Addressing Persistent Inflation Amidst Soaring Food Prices in Morocco
In January 2024, consumer prices in Morocco surged by 2.3%, driven primarily by a notable 4.2% increase in the food price index compared to the same period last year, as reported by the High Commission for Planning (HCP).
Despite a 0.6% month-on-month decline in the overall consumer price index (CPI) due to reduced vegetable prices, inflation remains a persistent challenge for Morocco's economy. The escalation in food costs, particularly for fish, fruits, coffee, and meats, continues to exert upward pressure on prices. Although fuel and pharmaceutical expenses experienced a slight decrease, non-food prices witnessed a 0.8% year-on-year rise.
In terms of regional disparities, Laayoune recorded the strongest inflation at 0.3%, while Oujda experienced the most significant monthly decrease of 1%. Core inflation, excluding volatile items, stubbornly remains high at 2.9% annually and 0.3% monthly.
The HCP's data underscores the enduring inflationary strains in Morocco, predominantly fueled by the essential cost of living, namely food. This trend persists despite forecasts indicating a gradual moderation of headline inflation to 2.11% by 2028. However, the outlook is clouded by persistently high unemployment rates, which exceeded 13% by the end of the previous year, exacerbated by drought-induced losses of 157,000 agricultural jobs.
With economic growth trailing the North African average and inflation surpassing wage increments, many Moroccans continue to experience financial strain. Against the backdrop of unabated global food costs, the government faces an ongoing challenge to rein in consumer prices and alleviate the economic burden on its citizens.