Morocco plans to inject an additional 20 billion dirhams ($2 billion) into its 2026 state budget to finance measures aimed at cushioning the domestic impact of the ongoing conflict in the Middle East, Reuters reported on Thursday.
Citing a government source who requested anonymity because they were not authorized to speak publicly, Reuters said the move comes as Moroccan authorities seek to shield consumers from the economic fallout of disruptions in global energy markets.
Government spokesman Mustapha Baitas announced the additional measures to reporters without disclosing the value of the planned funding.
According to Reuters, Morocco has been particularly exposed to the repercussions of the conflict because it imports most of its oil, gas and coal needs and has no domestic refining capacity.
Baitas said 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.”
The measures include subsidies aimed at keeping prices of cooking gas, transport services and electricity stable.
Reuters also reported that the additional funds will help finance measures addressing the impact of floods that hit northern parts of Morocco during the winter, in addition to covering other unforeseen expenditures linked to the broader international economic context.
Despite imported inflationary pressures, the Moroccan government expects the economy to grow by 5.3% this year, up from 4.6% last year, supported by improvements in the agricultural sector following abundant rainfall that ended seven years of drought.
Authorities also expect to reduce the fiscal deficit by 0.5 percentage points to 3% this year, while lowering government debt to 66% of GDP through improved growth and tax revenues.
Last month, Budget Minister Fouzi Lekjaa said subsidies aimed at stabilizing public transport prices and electricity tariffs cost around 648 million dirhams ($70.6 million) per month, according to Reuters.
