Inflation in Morocco

A short history of inflation in Morocco

Structural Adjustment (1983 to 1993)

Morocco entered a debt crisis in the early 1980s and accepted an International Monetary Fund programme in 1983 that cut subsidies and devalued the dirham, pushing inflation into double figures. Bread subsidy reductions provoked riots more than once during the decade, which is why successive governments have since treated the price of staples as a political question rather than an economic one.

The Managed Dirham (1990s onwards)

Morocco has kept the dirham pegged to a basket dominated by the euro, and combines it with a compensation fund that holds down the price of butane, flour and sugar. The result is inflation consistently lower than in most of the region, at the cost of a budget that carries the difference whenever world commodity prices rise.

Post-Covid Inflation (2021 to 2023)

In Morocco, prices rose fastest in February 2023, at 10.1%. The causes of the post-Covid inflation were global in nature, beginning with the lockdowns: factories and ports closed and the shipping between them fell out of sequence, so goods took longer to make and longer to arrive. Governments had spent heavily supporting household incomes through those closures, so when restrictions lifted there was money waiting to be spent and not enough on the shelves to spend it on. Then in February 2022 Russia invaded Ukraine, disrupting two of the world's largest suppliers of wheat, fertiliser, oil and gas at once, and the cost of everything grown, heated or transported rose with them.

Because the causes were shared, so was the timing: most countries peaked within a few months of one another in late 2022. The major inflation events covers this episode and the others in more detail.