The Moroccan Ministry of Economy and Finance revealed that the budget implementation as of May 2023 has led to a deficit of 24.6 billion dirhams, up from 13.9 billion dirhams a year ago.
According to the ministry’s monthly bulletin on budget implementation, this escalation is a result of a surge in total expenses by about 15.6 billion dirhams, contrasted with a revenue increase of 4.9 billion dirhams.
Revenue performance recorded about 40% achievement as it reached 123 billion dirhams at the end of May, compared to 118 billion dirhams for the same period last year. Tax revenues amounted to 109.2 billion dirhams, an increase of 4.8%, covering direct and indirect taxes as well as customs and registration fees.
Non-tax revenues, which include income from public institutions and companies, recorded 12.2 billion dirhams compared to 12.5 billion dirhams at the end of May of the previous year.
Meanwhile, expenditures hit 147.8 billion dirhams at the end of May compared to 132.2 billion dirhams a year ago, with a realization rate of approximately 39.1%. The majority of these expenditures went towards staff items amounting to around 63 billion dirhams.
Commenting on these figures, Samia El Jirari, member of the Researchers Forum at the Ministry of Economy and Finance, stated that the budget execution comes amidst “a challenging global context, complex and full of challenges on both the national and international levels, due to the surge in prices and the lack of vision regarding monetary policy.”
El Jirari emphasized, in a statement to Hespress, that “the development reform path can only be continued while maintaining the sustainability of public finance, which now serves as both a goal and a means for this developmental reform path.”
Based on the ministry’s figures, she noted that the “execution rate of regular expenses exceeds regular revenues compared to the financial law expectations, recording 43.2% and 39.4% respectively.”
She pointed out that “tax revenues, which constitute the majority of the state’s income, continue to increase, with the Value Added Tax recording an increase of 4.6%, indicating that spending is not affected by rising interest rates.”
Discussing corporate tax, El Jirari explained that “its decrease is a result of settlement operations, thanks to tax control on companies. This is a process that can potentially achieve more performance by increasing collection through additional efforts in tax surveillance.”
The wage bill continues to exert pressure on state expenses, representing about 38% of total expenditures, and continues to rise annually.
Data from the Ministry of Economy and Finance also revealed an increase in interest on debt, both domestic and foreign, with an increase of 1.3 billion for foreign debt and 529 million for domestic debt. El Jirari stated that Morocco “has controlled the rise in interest rates thanks to the composition of the domestic public debt which is primarily in local currency, especially in the current circumstances where there is a rise in interest rates and a decrease in the value of the dirham against the dollar.”
She referred to “intensive efforts to optimally control financing costs and preserve financial margins”, adding that “amidst all these challenges, trust and commendation from international institutions continue, following Morocco’s removal from the grey lists of the Financial Action Task Force and the European Union.”
