Subsidy cost is $330 million, benefit the wealthy

The subsidies to basic products in 1997-98 soaked 1 percent of the GDP with around USD 330 Million, from around $201 million in 1992.

According to a report of the economy and finance department, this increase is ascribed to higher consumption and more expensive production costs.

The report also points out that the generalized compensation system benefits high income groups rather than the poor. The global amount of subsidies to first-necessity products stands at an annual 95 dh ($9,8) for each high-income household against 37 dh ($3,8) only for a low-income family, Map reported.

Under the generalized compensation system for basic goods (flour, oil, sugar), the state budget pays for the difference between the actual cost of products and the selling price in order to maintain prices at a relatively low level.