Rabat – During the last decade, Morocco has witnessed a sharp increase of the budget deficit, hitting a new record according to the Directorate of Financial Studies and Forecasting (DEPF).
“Over the last decade, the fiscal situation has led to a widening of the budget deficit, from an average of 2.6 percent of GDP between 2000 and 2007 to 4.1 percent of GDP in 2008-2016, setting a record deficit in 2012 with 6.8 percent of GDP,” according to the public finance dashboard published recently by the department under the Ministry of the Economy and Finance.
The DEPF’s latest report, however, shows that everything is not grim in this scoreboard of public finances which gives an overview on the evolution of the various indicators of public finances of the state and local and regional authorities over the period 2000-2016.
Data collected by DEPF analysts shows that the years 2013 and 2014 experienced a significant recovery compared to 2012, recording deficits of 5.1 percent and 4.7 percent respectively.
According to the latter, “this decrease in the budget deficit reflects the significant reduction in the compensation charge (excluding the price support fund) of -23.7 percent in 2013, -22.4 percent in 2014 and -56.7 percent in 2015, due to the price indexation system for certain petroleum products.”
After analyzing the most significant data of the state and local authorities public finances, the report shows that the balance of the State budget, excluding debt interest, declined from 0.9 percent of GDP in the period 2000-2007 to -1.7 percent between 2008 and 2016.
The DEPF also noted that, after registering a surplus of 3.0 percent in 2008, the balance increase from year to year, settling at -4.4 percent of GDP in 2012 before moderating to -1.4 percent in 2015 and -1.3 percent last year.
According to the DEPF, the ordinary balance of the State budget (excluding VAT for local and regional authorities) improved in 2016 and 2015 with respective surpluses of +1.5 percent and 0.7 percent of GDP, after three years deficit (-0.7 percent in 2013, -2 percent in 2012 and -0.6 percent in 2011).
Between 2006 and 2010, this balance had a surplus period of +2.3 percent of GDP on average, to the point of representing +3.8 percent of GDP in 2008, or MAD 27.1 billion, indicated the DEPF.
As pointed out by the DEPF, this public finance scoreboard also traces the trends and structural changes that have marked public finances over the last fifteen years. This highlights the impact of the reforms on the budget deficit and the major changes in funding modalities.