Inflation: Full speed

AS a challenge for economic policies, inflation continues its inexorable rise. It jumped 5.9% during the month of April, ac­cording to the High Commission for Planning (HCP). Core inflation, which excludes products at volatile prices and products at public prices, rose by 4.4% compared to April 2021. The consu­mer price index (CPI) also increased by 4.5% at the end of the first four months of the year and by 1.8% com­pared to March.

This rise in inflation is a threat to household consumption, the growth rate of which slowed at the end of March, standing at barely +0.8% in the first quarter of 2022 ver­sus +1.5% during the same period of last year. The CPI was mainly driven by the 9.1% surge in food products in April, an item that represents a signifi­cant part of household spending. The latest HCP survey (2014) on consump­tion estimated its weight at 35.8% in the structure of expenditure. This item goes from 50.3% for the least affluent 10% people to 25.9% for the most af­fluent 10%. Inflation is also fuelled by soaring transport prices (12.4%) under the effect of higher fuel prices due to the impact of the war in Ukraine on the price of a barrel.

To preserve the purchasing power, the Government has maintained the policy of subsidizing basic necessities: sugar, wheat, and butane gas. The Govern­ment subsidy, to which 17.02 billion MAD are granted by the Appropria­tions Bill, has already mobilized 10.02 billion MAD, an increase of 59.1% compared to the first four months of last year. The overall cost could increase by an additional 15 billion dirhams, as announced by the Head of Government. The executive has also multiplied mechanisms to get through this difficult period. A series of mea­sures, some of which will be rolled out from September, has been enacted. In three months, 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 move to 15.55 MAD and then to 16.3 MAD (in September 2023). In the public 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 scale 7 (remuneration level in the public ser­vice) are also among the measures to be adopted. 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. In total, eight exceptional and circumstantial measures are plan­ned.

Khadija MASMOUDI