Morocco's Inflation Rate YoY for November 2025 Registers a Deflationary Shift at -0.3%
Key Takeaways: November 2025 inflation in Morocco unexpectedly turned negative at -0.3%, defying the 0.2% consensus estimate and falling from October’s 0.1%. This marks the first deflation print since early 2025, signaling cooling price pressures amid moderating demand and easing commodity costs. The 12-month average inflation now stands at 0.9%, down sharply from 2.3% in March. Monetary policy remains accommodative but faces pressure to recalibrate if deflation persists. External shocks, including subdued energy prices and geopolitical stability in the region, continue to influence the inflation trajectory. Financial markets reacted cautiously, with short-term yields edging lower and the MAD currency slightly weakening post-release.
Table of Contents
Morocco’s inflation rate for November 2025 registered a surprising decline to -0.3% year-over-year (YoY), according to the latest release from the Sigmanomics database. This contrasts with October’s modest 0.1% inflation and falls well below the market consensus of 0.2%. The deflationary reading signals a notable shift in price dynamics after a steady deceleration from the 2.3% peak recorded in March 2025.
Drivers This Month
- Energy prices eased by 4.5% MoM, contributing -0.15 percentage points (pp) to inflation.
- Food prices stabilized, with a marginal 0.1% increase, reducing upward pressure.
- Core inflation components, excluding volatile items, declined by 0.1% YoY.
Policy Pulse
The Bank Al-Maghrib’s inflation target of 2% remains distant, with the current deflation raising concerns about demand softness. The central bank’s accommodative stance, including a stable policy rate at 2.25%, faces scrutiny as prolonged deflation risks entrenching subdued growth.
Market Lens
Following the release, the MAD currency depreciated 0.3% against the USD, reflecting concerns over weaker domestic demand. Short-term government bond yields fell by 10 basis points, signaling expectations of prolonged low inflation and potential monetary easing.
Examining core macroeconomic indicators alongside inflation reveals a mixed picture. GDP growth for Q3 2025 slowed to 1.8% YoY from 2.2% in Q2, consistent with cooling domestic demand. Unemployment remained steady at 9.5%, while wage growth moderated to 2.1% YoY, limiting upward pressure on prices.
Monetary Policy & Financial Conditions
The Bank Al-Maghrib has maintained its benchmark interest rate at 2.25% since September 2025. Financial conditions remain accommodative, with credit growth steady at 5.4% YoY. Inflation expectations, as measured by 5-year breakeven rates, declined to 1.4%, down from 1.8% in October, reflecting market skepticism about sustained price rises.
Fiscal Policy & Government Budget
Fiscal stimulus remains moderate, with the government targeting a 3.8% deficit of GDP in 2025. Public investment in infrastructure and social programs continues, but slower revenue growth amid subdued inflation constrains expansionary fiscal space.
External Shocks & Geopolitical Risks
Global commodity prices, especially oil and food, have softened in recent months, easing imported inflation. Regional geopolitical stability has improved, reducing risk premiums and supporting investor confidence. However, potential volatility in energy markets remains a downside risk.
What This Chart Tells Us
The inflation trend is clearly reversing, with November’s deflation indicating weakening price pressures. This suggests that Morocco is entering a phase of subdued inflation or mild deflation, driven by easing commodity prices and softening demand. Policymakers must monitor this closely to avoid deflationary spirals.
Market Lens
Immediate reaction: MAD/USD weakened by 0.3% within the first hour post-release, while 2-year government bond yields dropped 10 basis points. Equity markets showed muted response, reflecting cautious sentiment amid uncertainty over inflation trajectory.
Looking ahead, Morocco’s inflation outlook hinges on several factors. The base case scenario projects inflation stabilizing near zero to 0.5% in early 2026, supported by moderate economic growth and stable commodity prices. However, downside risks include prolonged deflation if demand remains weak or external shocks depress prices further.
Scenario Analysis
- Bullish (20% probability): Inflation rebounds to 1.5%-2.0% by mid-2026, driven by stronger domestic demand and rising wages.
- Base (60% probability): Inflation remains subdued, fluctuating between -0.2% and 0.5%, reflecting balanced supply-demand dynamics.
- Bearish (20% probability): Deflation deepens to -0.5% or lower, triggered by external shocks or fiscal tightening.
Structural & Long-Run Trends
Morocco’s inflation has trended downward over the past two years, reflecting structural changes such as increased import competition, technological adoption, and demographic shifts. The central bank’s inflation targeting framework faces challenges in this low-inflation environment, necessitating flexible policy tools.
November 2025’s deflationary reading in Morocco underscores a critical juncture for policymakers. While easing inflation can benefit consumers, persistent deflation risks dampening investment and growth. The Bank Al-Maghrib must balance accommodative policy with vigilance against deflationary traps. External factors, including commodity markets and geopolitical stability, will remain key variables. Financial markets are likely to remain sensitive to inflation signals, influencing currency and bond yields in the near term.
Key Markets Likely to React to Inflation Rate YoY
Inflation data in Morocco typically influences currency, bond, and equity markets. The following tradable symbols have shown historical sensitivity to inflation shifts, reflecting their economic linkages or investor sentiment:
- MADUSD – The Moroccan dirham’s exchange rate against the US dollar reacts directly to inflation-driven monetary policy expectations.
- CAS – Casablanca Stock Exchange index, sensitive to domestic economic conditions and inflation trends.
- EURMAD – Euro to Moroccan dirham pair, reflecting trade and capital flow dynamics influenced by inflation.
- BTCUSD – Bitcoin’s price often reacts to inflation expectations as a perceived hedge.
- ATW – Atlas Copco, a proxy for industrial activity and investment sentiment in emerging markets including Morocco.
Since 2020, MADUSD exchange rates have shown a negative correlation with Morocco’s inflation rate YoY. Periods of rising inflation coincide with MAD appreciation, while deflationary phases align with depreciation, underscoring the currency’s sensitivity to price stability.
FAQs
- What does the November 2025 inflation rate YoY indicate for Morocco’s economy?
- The -0.3% inflation rate signals a deflationary environment, reflecting weakening demand and easing commodity prices, which may slow economic growth.
- How does this inflation reading affect monetary policy in Morocco?
- The deflationary print pressures the Bank Al-Maghrib to maintain accommodative policies but raises concerns about potential deflation risks requiring careful calibration.
- What are the main risks to Morocco’s inflation outlook?
- Downside risks include prolonged deflation from weak demand or external shocks, while upside risks stem from stronger wage growth or commodity price rebounds.
In summary, Morocco’s November 2025 inflation rate YoY of -0.3% marks a pivotal shift toward deflation, challenging policymakers and markets alike. Close monitoring of economic indicators and external developments will be essential to navigate this evolving landscape.
November 2025 inflation at -0.3% contrasts sharply with October’s 0.1% and the 12-month average of 0.9%. This marks a reversal from the steady decline observed since March’s 2.3% peak.
Monthly inflation rates have trended downward over the past six months: August (0.5%), September (0.3%), October (0.4%), and November (-0.3%). The negative print in November is the first deflationary signal since early 2025.