Morocco's consumer price inflation almost doubled to an annual 1.9 per cent in June from its level a month earlier, official data showed on Friday, after the government imposed a sharp hike in fuel prices to tame government spending on subsidies.



On a monthly basis, inflation rose 0.5 per cent in June from May, driven by a 0.2 per cent rise in food prices and a 4 per cent jump in transport costs, the High Planning Authority (HCP) said.



But on an annual basis, prices of food products, which account for about 40 per cent of the consumer price index's total weighting, increased by 2 per cent in June while transportation costs climbed 1.3 per cent.



Core inflation rose 0.6 per cent in June from its level a year earlier, the authority said. Inflation, which stood at 0.9 per cent in 2011, is projected to rise to as much as 2.5 per cent in 2012, the government has said.



On 2 June, the cash-strapped government raised prices of refined oil products by up to 27 per cent, the sharpest single increase in fuel prices in many years.



The state spent the equivalent of 6 per cent of the country's $100 billion gross domestic product (GDP) in 2011 on subsidising staples, mostly wheat and sugar, as well as energy products, to hold down inflation.



The government is preparing a reform of the subsidy system that would reduce the burden on public finances while ensuring that poorer Moroccans obtain direct compensation from the state for the dismantling of the subsidies.

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