Morocco’s Budget Deficit Soars to 25.5 Billion Dirhams Amid Coronavirus Crisis

The effects of the coronavirus health crisis on public finances are now perceptible. L’Économiste announced a budget deficit that increased from 20.6 billion to 25.5 billion dirhams, at the end of May 2020.

However, noting the inopportune nature of monitoring the state budget balance in the midst of the crisis, the newspaper welcomed the solidarity of companies and Moroccans, materialized by their contribution to the Pandemic Management Fund. Of the 33 billion dirhams collected (23 billion dirhams in donations, and 10 billion dirhams in budget resources), 14.9 billion have been committed to reducing the impact of the cessation of economic activity on the general state budget, it notes, specifying that the budget deficit, without taking into account the Fund, stands at 43.6 billion dirhams.

"Never before has so much public money been mobilized to safeguard businesses and jobs. The restart of the economy will require the mobilization of significant resources," the same source also notes, which reported a 10% drop in ordinary revenue at the end of May, the confinement having led to a drop in consumption and imports. Similarly, the income tax returns were impacted by the collapse of the base and the deferral of deadlines granted by the government to struggling businesses. Under these conditions, the newspaper fears a double-digit increase in the impact of the crisis on businesses, despite the measures taken to support the most affected.

According to the newspaper, privatizations (3 billion dirhams budgeted) and new financing mechanisms (around 12 billion dirhams mobilized) are as many levers to be activated in order to increase revenue for the rest of the year, while ensuring exceptional expenses due to the crisis.