Morocco’s Budget Deficit Soars to 50.5 Billion Dirhams Amid COVID-19 Crisis

The impact of the Covid-19 pandemic on Moroccan public finances is disastrous. Between September and October, a widening of 7.7 billion DH in the budget deficit, to 50.5 billion DH, indicates L’Économiste, adding that in view of the evolution of the health situation, "it would stand at 7.5% of GDP by the end of the year".

Also, the employers’ association is making a "plea for a more pronounced budgetary stimulus, even if it means increasing public debt to promote a rapid rebound of the economy," the newspaper reports.

The government’s objective of reducing the budget deficit to 6.5% in 2021 cannot be achieved without the acceleration of the public administration, aimed at rationalizing expenditure. "Operating expenses would increase by an average of 3.6% over the 2021-2023 period, while investment would stabilize around 78 billion DH over the same period," notes the same source.

According to the newspaper, spending on goods and services increased by 6.3% while investment declined by 6.3% to 49.8 billion DH at the end of October. On the other hand, revenues fell by 13.4 billion DH (7.7%). VAT revenues were the most affected (10.6%) while excise tax revenues declined by 2.8 billion DH, as did registration and stamp duties.

L’Économiste also notes a limited decline in direct taxes of 2 billion DH and a 1% increase to 38 billion DH in corporate tax revenues. In addition, 2.1 billion DH come from solidarity contributions on profits.