Inflation in Morocco has continued its downward trend, reaching its lowest level in over two years in the first quarter of 2024 (1.1%, down 2.7 points from the previous quarter), according to the Higher Planning Commission (HCP). This easing in prices is attributed to a marked slowdown in food prices (to 1.4% year-on-year) and a smaller increase in non-food prices (back to 0.9% year-on-year), as detailed in the HCP's note. The report further details that underlying inflation, excluding government-controlled prices and volatile products, followed a similar trend. It reached 2.5% in the first quarter of 2024, down from 3.7% a quarter earlier, benefitting from easing food (excluding fresh produce) and manufactured goods prices. Food prices, which had risen sharply last year, were the main driver behind the fall in inflation. This is particularly thanks to a 0.6 point drop in fresh produce prices, especially fresh vegetables and citrus fruits. Increased market availability, due in part to alternating production cycles and rising imports, is credited with easing pressure on these prices. Excluding fresh produce, the continued slowdown in prices of cereal-based products and edible oils, attributable to falling international prices, also supported the ongoing deceleration in inflation. Meanwhile, the usual rise in tobacco prices in January was smaller than that recorded a year earlier (2.2%, instead of 5.4%). As for non-food prices, the slowdown was more marked for manufactured goods (0.6%, after 1.6% in the previous quarter) and, to a lesser extent, for services (1.1%, after 1.2%). This was essentially driven by the downward adjustment of pharmaceutical product prices in January (contributing -0.1 point to inflation), against a backdrop of reduced VAT on these products. Conversely, energy prices remained virtually stagnant (-0.1%), following the 1.5% decline recorded in the previous quarter.
