Morocco plans to increase its budget by $2 billion to mitigate the economic effects of the conflict in the Middle East
The Moroccan government intends to allocate an additional 20 billion dirhams ($2 billion) to its 2026 budget to implement measures aimed at mitigating the effects of the Middle East conflict on the domestic market, a government source informed Reuters on Thursday.
An anonymous source, not authorized to speak publicly, provided information following the announcement by government spokesman Mustapha Baitas to reporters, though the specific value of the additional funding was not disclosed.
The significant energy supply disruption caused by the conflict in the Middle East is especially challenging for Morocco, a country that relies heavily on imports for its oil, gas, and coal requirements and lacks domestic refining capabilities.
Baitas informed reporters that the budget adjustments are intended to “allocate necessary reserve funds to address potential consequences should the current situation persist, particularly in relation to supporting citizens’ purchasing power.”
He stated that the measures encompass subsidies aimed at maintaining stable prices for cooking gas, transport services, and electricity.
The extra funds would also support initiatives to tackle the effects of the floods that affected northern regions of the country this winter, in addition to covering other unexpected expenses related to the consequences of the global economic situation, he stated.
In spite of the challenges posed by imported inflationary pressures, the government anticipates a 5.3% growth in the economy this year, up from 4.6% last year. This optimistic outlook is supported by a recovery in the agricultural sector, thanks to the abundant rainfall that has brought an end to seven years of drought.
The expectation is to reduce the fiscal deficit by 0.5 percentage points to 3% this year, driven by enhanced growth and tax revenues, alongside a decrease in government debt to 66% of GDP.
According to Budget Minister Fouzi Lekjaa, subsidies aimed at stabilizing public transport prices and electricity tariffs amount to approximately 648 million dirhams ($70.6 million) each month.
