Morocco’s November Inflation Rate MoM: A Sharp Deflationary Turn
The latest inflation rate MoM for Morocco (MA) plunged to -0.60% in November 2025, sharply below the 0.30% consensus estimate and reversing the prior 0.20% rise. This marks the steepest monthly drop since June 2025 and signals easing price pressures amid mixed macroeconomic signals. Key drivers include lower food and energy costs, while monetary policy remains cautiously accommodative. Financial markets reacted swiftly, pricing in a slower pace of rate hikes. External risks from geopolitical tensions and commodity volatility persist, but structural trends suggest a gradual return to stable inflation.
Table of Contents
The November 2025 inflation rate MoM for Morocco registered a -0.60% decline, a significant reversal from October’s 0.20% increase and well below the 0.30% forecast. This deflationary move is the largest monthly drop recorded in the past six months, according to the Sigmanomics database. Over the past year, inflation has averaged a modest 0.10% MoM, reflecting a volatile but contained price environment.
Drivers this month
- Food prices fell by 0.80%, driven by improved harvests and lower import costs.
- Energy costs declined 1.20%, reflecting global oil price softness.
- Shelter and transportation costs remained stable, contributing minimally.
Policy pulse
The current inflation rate sits below the central bank’s 2% target band, suggesting room for a pause or slower tightening in monetary policy. The Bank of Morocco has maintained a cautious stance, balancing inflation control with growth support amid external uncertainties.
Market lens
Immediate reaction: The MAD currency weakened 0.30% against the USD within the first hour post-release, while 2-year government bond yields fell by 12 basis points, reflecting expectations of a more dovish monetary trajectory.
Core macroeconomic indicators provide context for the inflation print. Morocco’s GDP growth slowed to 2.10% YoY in Q3 2025, down from 2.50% in Q2, signaling moderate economic momentum. Unemployment remains steady at 9.40%, while consumer confidence dipped slightly amid global uncertainties.
Monetary Policy & Financial Conditions
The central bank’s key policy rate stands at 3.75%, unchanged since September 2025. Financial conditions have eased slightly, with credit growth at 5.20% YoY and stable liquidity in the banking system. Inflation expectations have moderated, with breakeven inflation rates on government bonds falling from 2.30% to 2.00% over the past month.
Fiscal Policy & Government Budget
Fiscal policy remains expansionary, with the government running a 3.80% of GDP deficit in Q3 2025, financed partly by domestic borrowing. Public investment in infrastructure and social programs supports demand, offsetting some deflationary pressures from external shocks.
External Shocks & Geopolitical Risks
Morocco faces ongoing risks from regional geopolitical tensions and commodity price volatility. Recent easing in oil prices has helped reduce inflation, but supply chain disruptions and currency fluctuations remain concerns.
Comparing the current print to historical data, the November deflation is the largest monthly drop since the -0.60% recorded in April 2024. The volatility reflects sensitivity to food and energy price swings, which historically have accounted for over 60% of monthly inflation variation.
This chart signals a potential inflection point in Morocco’s inflation trajectory, trending downward after a brief uptick in September and October. The sharp November decline suggests easing cost pressures but also raises questions about demand strength and monetary policy calibration.
Market lens
Immediate reaction: The MAD weakened 0.30% vs. USD, while 2-year yields dropped 12 basis points, reflecting market expectations of slower rate hikes. Inflation-linked bonds saw increased demand, pushing breakeven rates lower.
Looking ahead, Morocco’s inflation outlook is shaped by several competing forces. The recent deflationary print may signal a temporary pause in price pressures, but risks remain elevated due to external shocks and domestic demand fluctuations.
Bullish scenario (30% probability)
- Continued easing of global commodity prices supports further inflation moderation.
- Monetary policy remains accommodative, sustaining growth and stable prices.
- Fiscal stimulus boosts domestic demand without reigniting inflation.
Base scenario (50% probability)
- Inflation stabilizes near the central bank’s 2% target over the next six months.
- Food and energy prices fluctuate moderately, with no sharp shocks.
- Monetary policy adjusts cautiously to balance growth and inflation risks.
Bearish scenario (20% probability)
- Geopolitical tensions or supply disruptions trigger inflation spikes.
- Currency depreciation accelerates imported inflation pressures.
- Monetary tightening intensifies, risking slower growth or recession.
Morocco’s November inflation rate MoM print of -0.60% marks a notable deflationary shift after months of moderate increases. While this eases immediate inflation concerns, policymakers must remain vigilant against upside risks from external shocks and currency volatility. The balance of risks suggests a cautious approach to monetary policy, with close monitoring of core inflation and financial conditions. Structural trends point to a gradual normalization of inflation near target levels, supporting stable economic growth.
Key Markets Likely to React to Inflation Rate MoM
Inflation data in Morocco typically influences local currency, bond yields, and equity markets sensitive to interest rate expectations and consumer demand. The following five symbols historically track inflation trends and market sentiment in MA:
- MADUSD – The Moroccan dirham’s USD exchange rate reacts to inflation-driven monetary policy shifts.
- MAI – Morocco All-Share Index, sensitive to economic growth and inflation expectations.
- ATW – Attijariwafa Bank, a major financial institution impacted by interest rate changes.
- BTCUSD – Bitcoin, often viewed as an inflation hedge and alternative asset.
- EURMAD – Euro to Moroccan dirham rate, reflecting trade and capital flow dynamics.
Inflation vs. MADUSD Exchange Rate Since 2020
Since 2020, Morocco’s inflation rate MoM and the MADUSD exchange rate have shown a moderate inverse correlation. Periods of rising inflation often coincide with MAD depreciation, as monetary tightening expectations weigh on the currency. The November 2025 deflationary print coincided with a 0.30% MAD weakening, highlighting short-term market sensitivity to inflation surprises.
FAQs
- What caused Morocco’s inflation rate to drop sharply in November 2025?
- The decline was mainly due to lower food and energy prices, reflecting improved supply conditions and global commodity price softness.
- How does the November inflation print affect Morocco’s monetary policy?
- The -0.60% MoM inflation suggests a potential pause or slower pace in rate hikes, as inflation remains below the central bank’s target.
- What are the risks to Morocco’s inflation outlook?
- Risks include geopolitical tensions, currency depreciation, and supply chain disruptions that could reignite inflation pressures.
Key takeaway: Morocco’s sharp November deflation signals easing price pressures but underscores the need for vigilant policy amid persistent external risks.
Author
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
The November inflation rate MoM of -0.60% contrasts sharply with October’s 0.20% and the 12-month average of 0.10%. This reversal is the most pronounced since June 2025, when inflation fell by -0.40%. The chart below illustrates this volatility, highlighting a recent trend toward easing price pressures.
Key figure: The -0.60% drop is triple the magnitude of the average monthly decline over the past year, underscoring a sudden shift in inflation dynamics.