Electronic Science – Anas Al-Sha’ra / Dialogue
Many international and national reports warn of the danger of inflation, its disturbing repercussions on the economy and the threat to the purchasing power of citizens. Within the Moroccan context, the year 2022 witnessed a staggering inflation that reached 6.6 percent, at levels unprecedented in decades, and this also affects the rise in unemployment rates. It also contributes to the decline of medium and small enterprises, in terms of their economic activities and financial performance, and also limits the rate of growth. Among the solutions that Bank Al-Maghrib resorted to was its tightening of its monetary policy to facilitate the return of inflation to levels consistent with the goal of price stability, and it raised the main interest rate to 2.5 percent at the end of the year.
In the context of the glorious Throne Day, His Majesty King Mohammed VI received, at the Royal Palace in Tetouan, Abdellatif El Jouahri, Governor of Bank Al-Maghrib, on Saturday July 29, 2023, who presented his annual report to the Central Bank on the economic, monetary and financial situation for the year 2022.
The Wali of Bank Al-Maghrib said, while delivering the report before His Majesty, “Like most countries in the world, Morocco has not escaped the sharp escalation of inflationary pressures that marked the year. After an average rate of no more than 1.5 percent over the past twenty years, inflation reached 6.6 percent.” percent in 2022, the highest level since 1992.
The Wali of Bank Al-Maghrib stated that “the profound changes taking place in the international arena, with the escalation of the geopolitical divide and economic sovereignty, as well as the recurrence of severe climatic phenomena and the exacerbation of water stress, indicate major challenges that Morocco will face in the coming years.”
On the other hand, Abdellatif Jouahri stressed that, at the level of foreign exchanges, “the dynamism recorded in 2021 continued, supported by the good performance of Morocco’s global professions and the phosphate sector, highlighting that travel incomes improved to a record level, while the exceptional flow of remittances from Moroccans living abroad continued.”
And the spokesman highlighted, “Despite this unfavorable circumstance and the effort made by the state to mitigate the impact of high prices on families and businesses, the public financial situation continued to improve, as the budget deficit decreased to 5.2 percent of GDP.”
And within the context of the unprecedented rise in inflation, Abdelhak El-Tohamy, an economic analyst, said in his statement to El-Alam, that “the purchasing power of citizens decreases, and poverty increases, in light of inflation. That is why there are institutions that fight it, such as the Bank Al-Maghrib Foundation, and all central banks in the country.” The world, stressing that inflation has negative effects on the economy and on all major and minor levels,
He stressed that the successive external shocks on the Moroccan economy, the economist stressed, have weakened the purchasing power of households, including inflation, the Russian-Ukrainian war, in addition to the drought. These crises have collectively weakened the national economic fabric.
The problem of inflation is a major problem, because it affects various Moroccan social groups, especially the middle and vulnerable classes, and workers in the mainly informal sectors.
In his interview with Al-Alam Sofiane Bouchkour, he confirms that the national economy has been affected by the international situation characterized by “uncertainty”.
Soufiane Pushkor, an expert in territorial development and professor of economics at the Faculty of Law in Oujda, confirmed to Al-Alam that the Russian-Ukrainian war brought about unprecedented energy and food crises, which led to disruption in supplies and affected the global economy by declining growth rates from 6.3 percent a year. 2021 to 3.4 percent in 2022.
He pointed out that climatic changes, high temperatures and successive years of drought have contributed to stopping Morocco’s economic dynamism and curbing the recorded growth of its economic fabric, adding that high prices contribute to reducing the purchasing power of the consumer and reduce the demand for the economic fabric.
1- At your discretion; How did the Russian-Ukrainian war affect the national economy?
In fact, at the international level, the Russian-Ukrainian war caused unprecedented food-energy crises, as the two countries are among the largest exporters of energy and wheat in the world, and the conflict between them led to new geo-strategic positions, which led to a disruption in supplies and affected the global economy by a decline in oil prices. Growth from 6.3 percent in 2021 to 3.4 percent in 2022.
The war also contributed to the disruption of supply chains, which led to an increase in the general level of prices, or what is known as inflation, which reached 8 percent in the US states and 8.4 percent in the Eurozone, the first economic partner of the Kingdom of Morocco.
Because of the aforementioned factors, in addition to climatic changes, high temperatures and successive years of drought, they contributed to halting Morocco’s economic dynamism and curbing the recorded growth of its economic fabric. Morocco recorded an important growth rate in 2021, amounting to 7.9 percent, thanks to the economic, financial and social measures taken by the government, under royal directives, to mitigate the impact of Covid-19. year. The Moroccan economy was affected by the international situation characterized by “uncertainty”, and the growth rate declined during the year 2022 to 1.3 percent, after a decline in the agricultural value added by 12.9 percent and a decline in the non-agricultural value added by 3 percent.
On the other hand, the labor market has not been spared the repercussions of the international crisis and its effects on the national economy, which explains the loss of about 24,000 jobs in the labor market and the rise in the national unemployment rate to reach 12.3 percent, compared to 11.9 percent in 2020. According to the Social Indicators Report for the year 2020, issued According to the High Commission for Planning, the number of unemployed has reached 1.5 million, and the percentage of degree holders is 19.6 percent.
2- To what extent did the wave of global inflation affect the national economy?
Inflation is the general rise in the price level, which is manifested through the same amount of money, during the period that no longer enables the consumer to buy the same amount of goods compared to a previous time period, for example 100 dirhams, the citizen no longer buys the same amount of vegetables as it was in the past Today, it is much less.
And when the prices of all products and commodities rise, then we talk about inflation. This is what we are recording today in Morocco after the general rise in the prices of vegetables, fruits and all other commodities, similar to the European countries and even the advanced ones such as Britain and France.
In this context, we recall the middle of last year, when the inflation rate reached 8.3 percent in Europe, 8.5 percent in Egypt, and 7.5 percent in Senegal. By way of comparison, not analogy, Morocco managed to control the inflation rate within the limits of 5.8 percent during the first 8 months. From the year 2022, thanks to the support of the productive sectors by 40 billion dirhams and the support of the purchasing power, and the 2023 Finance Law expected inflation to reach a rate of 2 percent, after monetary policy measures in Morocco, such as raising the main interest rate on two occasions after the first increase, from 2.5 percent to 3 percent, However, after a few months, the level of inflation, according to the High Commissioner for Planning, rose to 10 percent.
In my estimation, the main reason behind the price hike in the beginning was external through: the Covid-19 crisis and the Russian-Ukrainian war. Today, with the continued rise in prices of basic products such as tomatoes, onions, and all vegetables and fruits, the origin of the price increase has become internal, linked to supplying the markets. And the scarcity of basic products, as a result of the scarcity of rain, climatic changes, and the lack of water directed during the last year to supply drinking water as a priority.
Today, we note with satisfaction the gradual decline in the prices of basic commodities, which is the result of government measures taken to protect the purchasing power of citizens, as well as to protect the national economy. High prices contribute to reducing the purchasing power of the consumer and decreasing the demand for the economic fabric. Accordingly, the government, which, thanks to the royal instructions, took measures to support basic products such as flour and sugar and to support transport professionals, which contributed to alleviating inflation on Moroccan families, whose patience and sense of citizenship are also appreciated.
3- How have external shocks since 2022 weakened the national economic fabric and increased the vulnerability of the population?
In reality; I have a somewhat different approach in answering your question, as I consider these external shocks as opportunities for Morocco to strengthen its international position, supported by the achievements of some productive sectors such as Morocco’s global professions. We are talking about the automobile and aircraft sector, phosphate and its derivatives, and these are among the positive results in light of the international crises. accumulated.
It is true that the national economic fabric has been damaged, as previously mentioned, but on the other hand, Morocco’s exports increased by 30.1 percent, travel receipts by 93.6 billion dirhams, and remittances from Moroccans around the world reached 110.7 billion dirhams.
In light of the state of uncertainty at the international level, and the resulting global political, economic and geo-strategic shifts; Morocco was the exception and accumulated a positive outcome after a series of crises:
– the global financial crisis of 2008;
The COVID-19 crisis and its economic and social repercussions;
– The Russian-Ukrainian war and its effects on prices and inflation levels.
In addition to the positive balance, Morocco was able to transform constraints into real opportunities for sustainable development in the country. With the current global situation, China and its allies are positioning themselves with Russia, and America and Europe are lining up with Ukraine, turning the Cold War into an open economic, commercial, digital and military war. International soil areas (Europe) have lost and will lose their comparative advantages “ses” avantages comparatifs, in favor of the safest, most secure and stable countries, and even the most prepared in terms of infrastructure, qualified labor force and their geographical proximity.
In this context, our country, Morocco, is a strong candidate to constitute an alternative base, not only thanks to its achievements in various fields, including infrastructure, economics, and social and environmental projects, but also thanks to Morocco’s availability of a strategic vision adopted by His Majesty King Mohammed VI, may God grant him victory, through the development model. The new, and through his keenness and continuous and permanent directives with the aim of downloading this workshop, and ensuring an intelligent and sober international position based on the consecration and strengthening of the confidence of the major countries in our country, which is evident through Moroccan diplomacy and the continued opening of consulates and economic offices in the Moroccan desert.
In general, to the extent that the pandemic and successive crises of war and climatic changes enabled the emergence of imbalances and the fragility of the national economy, the more Morocco showed the elements of economic resilience. Morocco has made constraints a real opportunity for sustainable development, thanks to its availability on a strategic vision aimed at achieving national sovereignty – in its various energy dimensions (reducing energy dependence and investing in renewable energies and green hydrogen), water and food (reducing dependence on climate fluctuations, through desalination of sea water and the continued construction of dams). major).