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By Souhail Karam
RABAT, April 12 (Reuters)
Morocco’s parliament on Wednesday passed the 2012 budget that targets a deficit below 5 percent and subjects corporates and alcohol to higher taxes as the government seeks to reduce wide social inequalities and tame protests over unemployment.
The budget won 166 votes out of 230 present at the session in the 395-member parliament, the official MAP news agency said.
The budget provided for a total expenditure of 346.8 billion dirhams ($40.86 billion) and receipts at 314.5 billion dirhams. It targets a budget deficit of less than 5 percent after it hit 6.1 percent in 2011, its highest since the 1990s.
The impact of bad weather on farming prompted the government to revise down to between 3 and 4 percent the tourism- and agriculture-reliant economy’s growth projection for 2012 from an initial 4.2 percent and the 4.9 percent it achieved in 2011.
The central bank says that with the impact of the slowdown in the euro zone, Morocco’s main trade partner, the $100-billion economy will grow only by between 2 and 3 percent.
Inflation is projected to jump to as much as 2.5 percent from 0.9 percent in 2011 as the government is expected to provide less subsidies – especially for energy products – should global prices surge.
The budget was based on an oil price of $100 a barrel which is below current market price.
Public investment was fixed at about 60 billion dirhams, which is 25 percent above its level in 2011, but accounts for 17 percent of expenditure, while military expenditure inched up to 52.6 billion dirhams.
The state will foot 93.5 billion dirhams in public wages in 2012, which is 5.5 percent above 2011 when it raised public sector wages as it sought to contain any spillover from Arab Spring revolts.
The government agreed to amendments from parliament to widen the imposition of a new tax on firms to help it develop poor areas and to raise tax on beer and spirits in 2012 by 12.5 and 43 percent respectively, the first increase since 2010.
The budget also raises by almost 40 percent to 26,200 the number of jobs the public sector, mostly in home affairs and education departments, is projected to create in 2012.
“I don’t think the budget is efficiency-driven: Too many tax loopholes, too much on compensation (subsidies) fund, too many hiring,” tweeted Zouhair Baghough, who blogs as the Moorish Wanderer on Moroccan economic issues.
