2024-02-11 17:25:45
The situation of the Treasury’s expenses and resources, on the basis of revenue collected and expenditure issued, shows a budget deficit of 73.7 billion dirhams (billion dirhams) in 2023, compared to a deficit of 76.3 billion dirhams a year earlier, according to the General Treasury of the Kingdom (TGR). This deficit takes into account a positive balance of MAD 31.1 billion released by the Special Treasury Accounts (CST) and the autonomously managed State Services (SEGMA), reports the TGR in its Monthly Bulletin of Statistics of public finances (BMSFP). A situation which, however, remains controllable, because after reaching a peak during the period of the pandemic, with debt reaching 72.2% in 2020, the Moroccan Treasury is firmly committed to reversing the trajectory of public debt. The target threshold is a ceiling of 70% by 2026. This objective seems well within reach. The supervisory department’s estimates come out with a level of 70.3% at the end of 2024.
Until this deadline, the Treasury presents encouraging indicators: its debt remains mainly a fixed rate debt. Furthermore, gross ordinary revenues increased by 10.6% to MAD 339 billion, following the increase in direct taxes of 5.4%, customs duties of 12.8%, indirect taxes of 3.6%, registration and stamp duties of 11.1% and non-tax revenue of 41.2%, specifies the same source. Concerning the expenditure issued under the general budget, it was 532.7 billion dirhams in 2023, an increase of 15.3% compared to their level in 2022, due to the 4.5% increase in expenditure. operating costs, 24.2% of investment expenditure and 39.6% of budgeted debt charges.
The increase in budgeted debt charges is explained by the 51.4% increase in principal repayments (89 billion dirhams against 58.8 billion dirhams) and 15.8% in interest on the debt (33.4 billion dirhams against 28.9 billion dirhams).
Furthermore, the TGR indicates that CST revenues reached 182.1 billion dirhams, taking into account payments received from common investment charges from the general budget for 32.7 billion dirhams. The expenditure issued was 151.6 billion dirhams, including the CST’s share of reimbursements, tax reliefs and restitutions for 5.2 billion dirhams.
The balance of all Treasury Special Accounts amounted to MAD 30.5 billion. As for autonomously managed state services (SEGMA), their revenues exceeded 3.26 billion dirhams in 2023, an increase of 27% compared to 2022. Expenditures were nearly 2.65 billion dirhams in 2023, up 3.2%.
At the end of December 2023, ordinary revenues were achieved at 115.6% of the forecasts of the Finance Law, ordinary expenditures were executed for 107.4% and investment expenditures were issued for 112.4%. %.
Challenges and measures
Taking into account inflationary pressures and the need not to weaken the economic recovery, monetary policy remains accommodative. The Central Bank has maintained the main key rate at 3% since March 2023, a low level from a historical point of view, according to analysts, and remains negative in real terms and particularly low compared to countries in the region.
Despite a now significant rate misalignment compared to the United States (key rate at 5.25-5.5%) and the euro zone (4.25%), the dirham is holding steady, or even slightly appreciated in the summer of 2023 against the two currencies making up its anchor basket (USD and EUR), benefiting in particular from the resumption of tourist activity, significant transfers from the diaspora and attractiveness for foreign investors.
Budget deficit under control
In such a difficult international context, the Kingdom manages to control the country’s major financial balances. With higher tax revenues than expected, Morocco was able to reduce its budget deficit in 2022 (5.2% compared to 6.0% in 2021 and 7.1% in 2022) and this consolidation should continue (4.9% in 2023 according to the International Monetary Fund (IMF) and 4% for 2024 planned in the latest draft Finance Law).
Despite a strong increase during the pandemic period, Morocco’s debt remains viable in the medium term thanks to controlled ratios (debt at 69.7% of GDP in 2023 according to the IMF) and factors limiting the impact of the increase in rates on debt service: large number of national institutional investors – therefore long-term -, comfortable debt maturity (6 years on average) reducing refinancing risks, large share of concessional external debt , low share of Moroccan debt in foreign currencies (25%), according to observers.
Access to international financing
If Morocco finances itself mainly on the domestic market, the country’s fundamentals make it possible to guarantee privileged access to international financing.
Regarding concessional financing, the IMF granted the Kingdom in April 2023 a flexible credit line (LCM) for a ceiling of USD 5 billion, LCM usually reserved for richer countries. In September 2023, the IMF again approved Morocco’s recourse to the Resilience and Sustainability Facility (FRD) for USD 1.3 billion. These programs constitute a positive signal sent about the quality of the Moroccan signature.
Regarding financing on market conditions, the Kingdom made its first exit on international markets in two years on March 1, 2023 for USD 2.5 billion and benefited from very good conditions: coverage rate greater than 10 and spreads very reasonable compared to American bonds.
HCP forecasts for 2024
The Moroccan economy should continue in 2024 the recovery observed a year earlier. The High Commission for Planning (HCP) anticipates in this sense a strengthening of economic growth for the current financial year. A dynamic which should be supported by the investment effort and the expected increase in demand addressed to Morocco.
In 2024, gross domestic product should increase by 3.2% compared to 2.9% estimated for 2023. Nominal GDP should, for its part, increase by 6% in 2024 bringing inflation, measured by the implicit GDP index, to 2.8% in 2024 after recording 4.5% in 2023 and 3.1% in 2022.
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