Surging food and non-alcoholic prices offset plummeting transport charges, lifting Morocco’s CPI inflation to a 14-month high of 1.6% y/y in December from 1.2% y/y the previous month, the statistics office HCP said. In 2014, Morocco’s CPI inflation averaged a marginal 0.4% remaining well in the central bank’s comfort zone. 

Morocco’s central bank cut in December its benchmark interest rate by 25bps to 2.5% for the second straight time last year, underscoring that the CPI inflation forecast remains consistent with the medium-term price stability objective.

The central bank, however, expects the CPI inflation to quicken to 1.2% in 2015 and 1.3% by Q1 2016.

On a monthly basis, the CPI grew 0.3% in December compared with zero m/m growth in November.

Food prices (45% of basket) grew 0.9% m/m in December, fuelling the annual growth to 1.6% from 0.1% y/y in November.

Prices of fresh fruits fell 3.8% m/m in December but those of vegetables climbed 8.4% m/m and those of fish items grew 0.7%.

Housing prices (13% of basket), which include rents and utilities, ticked up 0.1% m/m in December, lifting the annual growth to 4.5% from 4.4% in November.

Transport prices fell 2.0% m/m as the government cut fuel costs. The annual growth thus braked to 0.3% in December from 2.5% y/y the month before.

The prices of diesel, fuel oil and gasoline are now being reviewed twice a month depending on the crude oil prices on the international market.

Telecoms costs recorded a zero annual growth, the same as in November.