Current Inflation Trends in Morocco

In 2026, Morocco is experiencing a period of low inflation, as reported by the High Commission for Planning (HCP). Over the first eight months of the year, prices have only risen by an average of 0.3%, largely due to a decrease in the cost of several food items. This moderate inflation trend is expected to persist until the end of the year, providing a temporary reprieve for consumers.

Analysts from BMI/Fitch Solutions have corroborated this data, highlighting a significant drop in food prices, which shifted from a year-on-year increase of 2% in the first half of 2025 to a deflationary state of -1% in early 2026. Given that food constitutes over 38% of the average household expenditure in Morocco, such fluctuations have a substantial impact on overall inflation rates. For the entirety of 2026, inflation is projected to average around 0.7%.

Future Inflation Projections and Potential Risks

Looking ahead to 2027, Bank Al-Maghrib forecasts an uptick in inflation, predicting it will rise to 1.5%. This increase is primarily attributed to core inflation—metrics that exclude volatile food prices and regulated items—which is expected to escalate from a negative -0.2% this year to a positive 2.2% in 2027. Two main factors are driving this anticipated rise: the waning effects of the current food-price reductions, particularly for olive oil, and an increase in imported inflation rates. Furthermore, analysts from BMI/Fitch suggest that the positive influence of good cereal harvests is likely to diminish by the fourth quarter of 2026.

However, there are risks that could disrupt this trajectory. Currency fluctuations pose a significant threat, particularly given Morocco's more flexible exchange-rate regime, which could exacerbate price pressures if the dirham depreciates unexpectedly. Additionally, the possibility of a subpar domestic harvest in 2027, coupled with Morocco's reliance on imported food, could mean that soaring global prices—potentially tied to climate phenomena like El Niño—could push inflation beyond current forecasts. Despite these challenges, BMI/Fitch anticipates that Bank Al-Maghrib will maintain its policy interest rate until the end of 2027, with inflation remaining below the 2% threshold. Historically, the Bank has undertaken only two periods of tightening since 1995, during which prior quarterly inflation rates exceeded 4% and 8% respectively.

As reported by northafricapost.com.