An economist keeps pace with the role of prices in shaping the “popular mood” of Moroccans

Rashid Oraz, an economist, said that “the current government has a short-term opportunity to tackle the problem of inflation before things get worse”, noting that “despite the stability of the situation, history indicates that will continue and that the popular mood on the street can change quickly.

Oraz added, in an article published by the Middle East Institute, under the title “Stability in Morocco is price stability”, that “previously, chants were spread in the stadiums calling for the departure of the Prime Minister, due to the current circumstances, and because lack of communication from the government.

And the same researcher continues: “Like the United States and Europe, Morocco, for its part, has witnessed a recent rise in inflation, registering a rate of 6.4 percent during July 2022, and it is an inflation from abroad, called ‘imported inflation’. ‘”, adding: “The government views with great concern that this situation is constantly evolving, especially since Morocco managed in the past to avoid runaway inflation in the Middle East and North Africa, which affected much of it during the past decade.

“Thanks to its sound monetary policy, the country was able to keep inflation at minimum levels in the past, but the situation has changed now and the domestic monetary policy cannot cope with the external factors that led to the recent increase in prices. “, according to the article.

The economic researcher continued: “The Moroccan government is facing a difficult situation, in which high inflation is accompanied by a slowdown in economic growth; In March, Bank Al-Maghrib forecast a 0.7% growth rate for 2022, before adjusting its estimate in June to around 1%: “This represents a sharp drop compared to the 7.9% growth rate % in 2021. The figures appear between the inflation rate AND the growth rate is reversed, at a time when inflation is increasing, economic growth is decreasing, and this is what puts social stability at stake”.

The same spokesman emphasized that “Morocco has benefited from relative stability over the past two decades thanks to a sound monetary policy that kept domestic inflation rates below 2 percent in most years, and helped maintain a relative political and social stability during the period of social upheavals in most years. parts of the Middle East and North Africa.

The author of the article noted that “this success gave Al-Maghrib Bank governor Abdellatif Jouahri the title of man of stability, compared to his peers in the region, many of whose countries have been hit by massive waves of inflation. ”, adding: “The zero tolerance approach to inflation has kept the governor at the head of the central bank for a long time.”

And Auraz added that “every price increase eventually led to an escalation of protests, which made Morocco learn the importance of dealing effectively with inflation,” continuing: “After 2010, with the rate of inflation rising to more than 2 percent, social tensions also increased. .” .

As the same researcher said: “The income and purchasing power of the citizens were very low, because the vast majority of them could not save and diversify their sources of income; Most of their income, especially wages and earnings, is spent on basic items, such as housing, transportation, food, and clothing. Even the middle class was chronically unable to save due to weak purchasing power, reliance on private educational services, and high housing prices in the cities.

Oraz pointed out that “the Covid-19 crisis, together with the stagnation of annual GDP per capita in the last decade, has exhausted the middle and working classes; This situation has especially affected workers in the informal sector, which represents 30 percent of the gross domestic product and occupies 70 percent of the country’s employment.