Morocco's CPI inflation accelerated to 1.9% y/y in August 2013 from 1.6% a month earlier on higher food, housing, restaurants and hotels and other goods and services price growth, the statistics office HCP said on September 20. Alcohol and tobacco prices remained high also fuelling the CPI. The latter might rise further in Q4 2013 as the government lifted energy subsidies as of September 16. The prices of diesel, fuel oil and gasoline would be reviewed twice a month depending on the crude oil prices on the international market.

The decision will likely boost transport and utilities prices ahead of the winter season when energy demand usually increases. But the overall CPI index is expected to remain subdued, according to the central bank,

In January-August, CPI inflation averaged 2.3% y/y, the same as at end-July.

On a monthly basis, the CPI grew 1.0% m/m compared with a 0.4% drop in July mainly on rising food costs.

Food prices (45% of basket) increased 2.1% m/m in August, sending the annual growth to 2.7% y/y from 2.1% a month earlier. Fresh fruits prices climbed 9.2% m/m in August and those of fresh vegetables rose 2.9%. Eggs, milk and cheese prices grew 2.8% m/m and those of meat increased 2.7% in August.

Transport prices edged up 0.2% m/m in August, keeping the component’s annual growth unchanged at 1.0% y/y. Housing prices (13% of basket), which include rents and utilities, rose 0.2% m/m in August lifting the annual increase to 1.3% y/y from 1.1% in July. Alcohol and tobacco prices stagnated in monthly terms, keeping the component’s annual growth at 6.5% y/y, the same as in July. 

The central bank has recently maintained its key rate unchanged at 3%, citing near- and medium-term subdued CPI inflation on still weak global economic activity and related demand.