Indomitable inflation | L’Economiste

Everybody talks about it. Inflation is present everywhere in the discussions of politicians, specialists, and households who have seen their purchasing power decline. For the sixth month in a row, inflation recorded a new record: 7.2% in June compared to the same period last year. Over a half-year, it increased by 5.1% while underlying inflation, which excludes products at volatile prices and those at public prices, increased by 6.4% in the first half!
The inflationary surge started towards the end of last year under the effect of the recovery at the international level before crossing a new course from February 2022. The invasion of Ukraine by Russia has exerted pressures on the raw materials market, which is already under pressure. As an importing country of energy and food products, in particular cereals, Morocco is strongly impacted. This imported inflation affects supply as much as demand and weighs heavily on household purchasing power and on the Government budget. Inflation is driven by food products whose CPI rose by 10.6% in June and 7.8% over a half-year . It is also fueled by soaring transport prices (17.6% in June and 10.6% during the first half) under the effect of higher fuel prices. An increase in tariffs is also noted at the level of clothing and footwear, miscellaneous goods, and services as well as for furniture, household items and routine household maintenance. For the High Commissioner for Planning, which has just delivered its economic forecasts for 2022 and the 2023 exploratory budget, imported inflation should reach an exceptional level this year, like most countries in the world, which should brutally affect purchasing power and weigh on the profitability of some productive sectors. The Commission recommends “prioritizing support for purchasing power in the public policies put in place, and targeting the economic sectors in need of support to better turn the wheel of the economy”. The Government has maintained the policy of subsidizing basic necessities: sugar, wheat, and butane gas. The Government subsidies to basic commodities, to which a budget extension was granted, increased by 155.2% under the effect of soaring prices on international markets. The subsidies scheme also granted direct aid to transporters, except that the system put in place is experiencing hiccups: the owner of a taxi permit does not pay the full subsidy to the driver, while others keep it for themselves! A series of measures, some of which will be deployed as of September, has also been enacted. The minimum wage in the private sector will increase by 5% (and 5% in September 2023). This will benefit a large number of people since nearly four out of ten employees are paid the minimum wage. Currently at 14.81 MAD per hour, the hourly price will initially increase to 15.55 MAD and then to 16.3 MAD (September 2023). In the civil service, pending the general increase in wages, which should be the subject of negotiations, an increase in the minimum wage of 500 MAD is granted. The remuneration of 50,000 civil servants will increase to 3,500 dirhams. An increase in family allowances for the 4th, 5th and 6th children and the abolition of salary scale 7 for civil servants are also among the measures. In the business world, particular attention was paid to companies operating in the construction industry faced with difficulties in the supply of raw materials and the unprecedented rise in prices.  
 Khadija MASMOUDI