Consumer Prices on the Rise After Four Months of Decline
The consumer price index in Morocco has witnessed an upward trend, marking a significant increase following a four-month period of deflation. According to the latest data from the High Commission for Planning (HCP), inflation accelerated to 0.9% year-on-year in March, the highest rate recorded in a year, after a previous decline of 0.6% the month before. This surge in inflation coincides with rising energy prices, which have impacted various economies due to the closure of the Strait of Hormuz at the end of February, causing oil prices to hover around $100 per barrel.
Factors Contributing to Inflation
The HCP attributed the recent inflation acceleration to a 0.6% increase in food prices and a 1.1% rise in non-food prices. Notably, the prices of fruits and vegetables saw a significant spike last month, driven by higher transportation costs. In response, the government has implemented support measures for the transportation sector to mitigate the impact of these price increases and has also increased subsidies for cooking gas. Since the onset of the conflict, fuel prices in Morocco have surged by 30%. The country relies entirely on imported refined petroleum products, with fuel distribution companies adjusting prices based on international market trends.
In March, Bank Al-Maghrib maintained the interest rate at 2.25% for the fourth consecutive time, acknowledging the repercussions of the Iran conflict and its potential consequences, particularly through external account channels and energy prices. The central bank anticipates inflation to reach 0.8% this year, down from an earlier estimate of 1.3% made in December. Meanwhile, S&P Global Market Intelligence predicts inflation in the kingdom could rise to 1.5% due to strong domestic demand and escalating energy and shipping costs stemming from the ongoing conflict, suggesting that interest rates will likely remain unchanged until the end of the year.
Research estimates from the African Development Bank indicate that sustained oil prices above $100 could push inflation between 3% and 4%, with economic growth potentially slowing by around one percentage point. According to HCP data, the annual inflation rate slowed to 0.8% last year, marking its lowest level in five years.
As reported by alborsaanews.com.
