Inflation in Morocco Hits Lowest Level in Eleven Quarters

Tuesday 09 April 2024 - 09:30

According to the High Commission for Planning (HCP), inflation would have continued its downward trend to reach its lowest level in eleven quarters, standing at +1.1% in the first quarter of 2024, which is 2.7 points lower than the previous quarter.

This easing of prices would have resulted from a marked slowdown in food prices, which retreated to +1.4% year-on-year, after reaching +7.7% one quarter earlier, and a lesser increase in non-food prices, returning to +0.9% year-on-year, compared to 1% recorded in the fourth quarter of 2023, according to the HCP in its economic outlook note for the first quarter of 2024 and prospects for the second quarter of 2024.

On the other hand, core inflation, which excludes prices subject to government intervention and volatile-priced products, would have experienced a similar evolution, but at a slower pace compared to overall inflation, reaching +2.5% in the first quarter of 2024, after +3.7% one quarter earlier, benefiting from reduced inflationary pressures in food (excluding fresh products) and declining prices of manufactured goods, the HCP notes.

Food prices, which saw a sharp increase last year, would have been the main driver of the inflation decline, thanks in particular to the fall in prices of fresh products, with a contribution of -0.6 points, especially fresh vegetables and citrus fruits.

The increase in market availability, partly due to the alternation in the production cycle of some crops and an increase in imports, would have led to a easing of tensions on their prices.

Excluding fresh products, the continued slowdown in prices, especially for cereal-based products and edible oils, attributable to the decline in their international prices, would also have supported the ongoing inflation deceleration.

Meanwhile, the usual increase in tobacco prices in January would have been lower than that recorded a year earlier (+2.2%, instead of +5.4% a year earlier).

Regarding non-food prices, the slowdown would have been more pronounced in manufactured goods (+0.6%, compared to +1.6% in the previous quarter) and, to a lesser extent, in services (+1.1%, after +1.2%).

This deceleration would have been mainly driven by the downward adjustment of pharmaceutical prices in January (-0.1 point contribution to inflation), in a context of reduction of VAT on these products. Conversely, energy prices would have remained virtually unchanged (-0.1%), after the 1.5% decline recorded in the previous quarter.