Rabat- The Moroccan economy is threatened by a deflation that might have a negative impact on employment, income and demand, says the latest monthly note of the Moroccan Conjuncture Centre (CMC).
The CMC said that a detailed analysis of the various indicators of the Moroccan economy showed a decline in the internal dynamics of the overall economic activity.
According to Arabic-speaking daily newspaper Al Massae in its November 28 issue, deflation is an unusual result of recent measures taken by the government, such as decompensating petroleum products, the increase in unit labor costs, the adjustment of electricity tariffs and the rising cost of imported raw materials.
These measures should normally contribute to the increase in the price index and not otherwise, Al Massae added.
The newspaper explained that the contradiction is due to two factors, namely the decline in profit margins of companies and their investment capacity and pessimism of Moroccan households who, faced with a national economy they feel agitated especially because of the rising in unemployment rates, are further reducing their spending.
Deflationary effects should lead to a contraction of GDP. It is urgent that the government rethink its macroeconomic policy, the newspaper concluded.