Morocco’s Budget Deficit Hits 7.6% of GDP Amid COVID-19 Economic Challenges

The execution of the 2020 Finance Act took place in the context of the Covid-19 pandemic. As is the case in most countries in the world, the Moroccan economy has also been severely impacted due to the measures taken to contain the spread of the pandemic. Thus, the ministry in its latest Treasury Charges and Resources Situation (SCRT) stressed that despite the non-realization of certain tax revenues, the execution rate of ordinary revenues, on a net basis of tax refunds, rebates and restitutions, stood at 103%.

This is explained by the shortfalls recorded in non-tax revenues, in particular innovative financing (-11.5 MMDH) and revenue and proceeds from asset disposals from public establishments and enterprises (-5 MMDH). These shortfalls were only partially offset by the improvement in "trust funds and donations" (+5.6 MMDH) and "miscellaneous income" (+4.3 MMDH), reports the MAP.

As for VAT credit refunds, they reached 10.4 MMDH at the end of December 2020 against 9.8 MMDH in 2019. For its part, the execution of expenditure was characterized by an effort to rationalize current expenditure in favor of strengthening the budgetary effort dictated by the crisis. The SCRT showed that despite the increase in compensation charges, current expenditure reached an execution rate of 97.7% compared to the LFR 2020 forecasts.

As for capital expenditure, the ministry reports that the execution of the LFR was characterized by a sustained investment effort. These are the issues under this heading, which reached an amount of 85.9 MMDH, i.e. a realization rate of 121.3%. Regarding the special Treasury accounts, they generated a surplus of 6.3 MMDH, due to 5.3 MMDH of the surplus generated by the Special Fund for the Management of the Covid-19 Pandemic, the same source specifies.