Morocco's CPI inflation cooled to a three-month low of 2.3% y/y in June from 2.8% the month before mainly on a significant retreat in transport price growth and food charges to a lesser extent, the statistics office HCP said. Alcohol and tobacco and transport charges remained high but telecoms costs remained in the red helping curb the overall price index.

The strong harvest season continues to keep CPI inflation anchored but the pattern might reverse in H2 as food stocks weaken, while a strong private consumption is fuelling inflationary pressures. Food prices will likely increase during the fasting month of Ramadan which started on July 8.

The central bank 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.

In January-June, CPI inflation averaged 2.4% y/y.

On a monthly basis, consumer prices stagnated compared to a 0.5% m/m growth in May.

Food prices (45% of basket) flattened in monthly terms, helping trim the annual increase to 3.1% y/y from 3.2% in May. Fresh fruit prices shrank 4.5% m/m in June, whereas those of fish products rose 1.6%. Prices of eggs and cheese increased 0.5% m/m in June.

Housing prices (13% of basket), which include rents and utilities, inched up 0.1% m/m, lifting the annual rise to 1.1% y/y from 1.0% in May. Transport prices edged down 0.1% m/m in June as the market absorbed the recent hike in fuel prices. The component’s annual growth, thus, braked to 1.6% y/y from 5.7% in May. Alcohol and tobacco prices stagnated in monthly terms, keeping the component’s annual growth at 6.5% y/y, the same as in May.