Morocco’s Inflation Slows, Govt Plans $62bn Budget
Morocco’s annual inflation rate eased slightly to 4.9% in September 2023 from 5% in the prior month, primarily attributed to ongoing alleviation in food inflation, which reached a 16-month-low of 10.1% from 10.6% in August.
This comes along with declines in transportation costs to 0.5% from 1.8%. There was also a deceleration in prices of clothing & footwear which dropped to 2.9% from 3%.
Also, furnishings, household equipment & routine household maintenance declined to 2.7% from 3%. In addition, restaurants & hotels inflation slowed down by 50 basis points in the month to 5.4% while inflation was steady for housing & utilities (at 1%) and health (at 0.7%).
The core rate, which excludes volatile items, stood at 4.9% in September, the lowest since April last year, after a prior 5.4% hike. On a monthly basis, consumer prices rose by 0.8%, following a 0.3% gain in August.
Elsewhere, Morocco’s finance ministry submitted on Friday to parliament approval of a 2024 draft budget totalling 638 billion dirhams ($62 bln), up 6.3% from a year ago.
The draft budget places priority on post-quake reconstruction the generalization of social safety nets, health and education reform and investment promotion.
The government has maintained the country’s growth forecast unchanged at 3.7% in 2024 from 3.4% expected this year. It also expects the fiscal deficit to narrow to 4% of GDP in 2024 from 4.5% expected this year, despite higher spending on social services and the reconstruction effort.
The country has said it will invest over the next five years $12 billion to rebuild homes and upgrade infrastructure in the areas hit by the 6.8 magnitude quake that left nearly 3,000 people dead.
The government will start this month distributing monthly aid of 2500 dirhams ($250) to the 60,000 affected households by the earthquake, mostly in the High Atlas mountains, Finance Minister Nadia Fettah Alaoui told parliament members later in the day.
She said the generalization of universal health insurance requires an upgrade of the health sector to which the government allocated $3.1 billion next year, she said.
Last week, Morocco’s housing ministry said it would offer financial aid to help lower and middle classes access housing. Drought-hit Morocco has also allocated $1.8 billion to invest in waterways, dams and desalination plants, she said.
The 2024 budget earmarked a record 335 billion dirhams ($32.5 bln) to public investments, up 11.6%, she said. The government expects inflation to slow to 2.4% next year from 6% expected this year.
The government also budgeted 16.357 billion dirhams ($ 1.6 bln) to control the prices of sugar, cooking gas and soft wheat next year. The finance minister said the needy will start receiving direct cash handouts of at least 500 dirhams monthly by year’s end. #Morocco’s Inflation Slows, Govt Plans $62bn Budget#