Friday, July 21

Morocco’s budget deficit declines to 5.4 per cent

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Gulf Today

RABAT: Morocco’s budget deficit fell to 5.4 per cent of gross domestic product in 2013, the Finance Ministry said. In 2010, the deficit was 4 per cent but the government spent more on subsidies, creating jobs and boosting public sector salaries to stifle the potential for the mass protests.

The government started to cut subsidies last year by partially indexing energy prices to global prices, but is under pressure from lenders such as the IMF to repair its public finances further after the protests, the impact of the euro zone crisis and drought.

Morocco’s government expects its deficit to fall further to 4.9 per cent of economic output in 2014.

Last week, the government said it also ended subsidies on gasoline and fuel oil and started to cut diesel subsidies significantly as part of its drive to repair the public finances.

However, subsidies next year would still total 35 billion dirhams ($4.27 billion), down from 42 billion in 2013, according the 2014 national budget.

The government cut its 2013 public investment spending by 25 billion dirhams ($3.02 billion) to keep the deficit close to 5.5 per cent of economic output as promised to international lenders.

The finance ministry said the public debt increased slightly to 62.5 per cent of GDP in 2013 from 59.6 per cent in 2012 and sees foreign reserves at 150.3 billion dirhams or 4.1 months of import needs. The trade deficit narrowed by 2.8 per cent in 2013 compared with 2012.

The statement said the government maintained its 4 per cent forecast for the growth in 2014, which would allow keeping the unemployment rate at 9 per cent, although the state planning agency expects the economy to slow to 2.4 per cent.

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