Morocco’s Inflation to Rise Moderately in 2021, HCP Reports

Inflation will rise during the second quarter of 2021 without severely affecting the purchasing power of Moroccans. This inflation is due to the rise in oil prices observed since last February and the rebound in prices of imported agricultural raw materials. The situation is likely to accelerate the pace of inflation growth in the second quarter compared to the progression of last year at the same period.

According to the HCP note, the rise in oil prices and other commodities on the international market induces the evolution of consumer prices. Clearly, the prices of edible oils and other food products such as cereals have increased. A rise in the price of red meat is expected during the second quarter. Eggs and white meats could experience a price increase due to the rise in raw materials. Because nearly 87% of the feeding and fattening of animals (red meat sector) and poultry (white meat sector) comes from imported corn, barley and soybean meal.

However, reassures the HCP note, inflationary risks "would remain limited in the short term". Indeed, the HCP foresees that the rise in prices of imported raw materials would be mitigated by the appreciation of the dirham against the dollar (-6.3% in January 2021, instead of -1.3% in 2020). On the other hand, the prospect of a good agricultural year after two successive drought seasons and the weak pressures emanating from demand could maintain the inflation rate during the year 2021 at still moderate levels.