The Minister Delegate in charge of the budget in Morocco, Fawzi Lakjaa, said that his country expects the budget deficit to shrink to 3% in 2026 from 4% expected this year, as higher tax revenues compensate for increased spending on social safety nets.
Lakjaa told members of Parliament that approximately one-third of the country’s families, or 3.9 million families, benefit from health coverage the cost of which is borne by the state and direct cash social support.
He stated that spending on social protection programs, increasing the wages of civil servants, and housing aid requires an additional 90 billion dirhams ($9 billion) annually.
He added that the rise in tax revenues thanks to the increase in corporate taxes and value-added taxes helped finance social spending “at a time when the government seeks to control public finances.”
He added that government revenues will rise to 461.3 billion dirhams (about 46.2 billion dollars) from 364.6 billion dirhams (36.5 billion dollars) expected this year.
The government’s regular revenues rose 17.5% in the first four months of 2024 compared to the same period last year.
This month, Morocco began a gradual reduction in cooking gas subsidies to further reduce the fiscal deficit.
Total spending on cooking gas, flour and sugar reached 64 billion dirhams in 2022 and 2023.
The government provided support worth 9 billion dirhams to the National Office of Electricity and Drinking Water in 2022 and 2023, to avoid higher electricity fees after the rise in energy prices on the international market.
Lakjaa said, “Next week, God willing, we will have an opportunity to discuss a decree that will bring an additional 4 million dirhams to the National Office of Electricity and Drinking Water so that electricity prices will not witness any change in the future.”
Morocco relies on imported coal to produce most of its electricity needs, and renewable energy represents about 18% of its consumption.
The minister said that the government expects the debt-to-GDP ratio to fall below 70% in 2026 from 71.1% in 2023.
