The financial analyst Oussama Oussaini was the guest of “L’Info en Face” of the “Le Matin” Group. At the microphone of Rachid Hallaouy, the expert delivered his analysis on raising the key rate to 2%, inflation and growth. Above all, he took advantage of this opportunity to salute this expected decision by the Central Bank and fervently defend his governor Abdelatif Jouahri, whom he describes as a great statesman. For him, without this increase in the key rate, the sovereignty of the dirham would have been lost.
The raising of the key rate to 2% by the Central Bank has been widely accepted as a necessity within the economic and financial sphere. Some are even fervent defenders of this decision which was expected. This is the case with the financial and economic analyst Oussama Oussaini who strongly praised it. “Abdelatif Jouahri is for me one of the few statesmen who remain, because he played his role in keeping monetary sovereignty for this country”, underlines Oussama Oussaini, during his appearance on the program “L’Info en Face” of the “Le Matin” group, of which he was the guest. For him, without this increase in the key rate, the sovereignty of the dirham would have been lost. “The disaster for a central bank director is to have a social work, it is not his role. Its role is precisely to avoid inflation and pay attention to the trade balance. I say congratulations to the wali of Bank Al-Maghrib (BAM) who was not influenced, despite all the pressure suffered. And to add: “personally, I hope that it will once again raise the rate in January”.
At the microphone of Rachid Hallaouy, the expert explains this increase as a “clear message” from Jouahri regarding the increase in the minimum wage. “You have to understand one thing, monetary policy and fiscal policy are two different things.” For him, it is the government that must give monetary policy its sovereignty. “When you have an economic fabric where 80% is for export, and where we also import a lot, monetary policy plays a more important role. We do not have an industrial policy to say that the economy plays an industrial role for the country”.
With regard to inflation, Oussama Oussaini explains that it is due “to a money supply which was created and which was not impacted in the economic fabric”. And to illustrate his point, the economist gives the example of a mortgage. “When a person wants to buy an apartment for 1 million DH, the bank doesn’t have that amount. It borrows it from the Central Bank. And for 12-15 years, the buyer repays little by little. But when we create money and then, instead of investing it, we spend it and we don’t even manage to recover the initial bet to be able to return it to the bank, it becomes problematic”. According to him, when money becomes more expensive, as it is today, the government has an interest in spending where there is profitability. “The government must revise its spending,” he insists. Asked about the “Moroccanization” of inflation, the expert said that we should stop spending public money on activities that are not profitable. “At the current level, 20% of the problems linked to inflation come from monetary policy and 80% from our fiscal policy”. For him, budgets must be kept for strategic sectors, including health. The solution: review Morocco’s “low cost” economic model. Some “50% of our GDP comes from the operating budget. If you want to increase it, I bet you that by injecting 10% more into the operating budget, the growth rate would easily increase by 5%”.
And to finance the budget and the GDP, the analyst stresses the importance of the private sector. “The operating budget does not bring in anything in terms of state revenue, because the state does not sell. With all due respect to civil servants, but they don’t produce. It’s the private sector that does it.” Citing the Swedish example, Oussama Oussaini recalls the shift initiated by the Scandinavian country in 1992. “The country had gone bankrupt. Banks have been nationalized. Twenty years later, look at the economy they have”. For him, taking drastic decisions is necessary to assert himself over the long term. “It’s better to take a slap once and for all than to take three a day.”
What about 2023? For the guest of Rachid Hallaouy, next year’s growth “is already weighed down”.
In short, the government must play its role and invest where it can generate returns on investment. Because, according to the expert, the problem would not be monetary, but budgetary.
Inflation and rising unemployment
For the guest of Rachid Hallaouy, in order to fight against the rise in unemployment and revive consumption, a reduction in the IR of high wages is essential. “It is the only way. I think that salaries cannot be increased despite the rise in the minimum wage.
I’m going to say something very simple, the interest on the debt is approximately between 5 and 8% of the GDP. With this increase of half a point in the key rate, by the end of the Akhannouch government’s five-year term, with the renewal of the debt, we will easily rise to 25-30% of GDP. I would even go very far, this increase of 0.5 points on a GDP of 130 billion is 65 billion. It is equal to the education budget. So tomorrow to be able to compensate for these 65 billion in additional debt interest, you have to save 50% on expenses! What is sovereignty? It is to allow a vision to be imposed on someone. And above all not to have a vision imposed on you. So somewhere it is in our interest to review our model.