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Rabat – The Ministry of Economy and Finance has released it’s half-yearly report on the execution of the 2019 Financial Law.
According to the report, Morocco has a deficit of MAD 21.8 billion as of June 2019. When taking into account the 2019 Finance Act, however, Morocco achieved a surplus of MAD 13.3 billion during the same period.
2019 Finance Act
Morocco’s 2019 Finance Act was approved in the winter of 2018. The project is based on a national growth rate of 3.2%, a contained inflation rate of less than 2%, and a constant budget deficit of 3.3%.
The plan gives priority to bolstering social policies that focus on education, employment, and health. The other goals of the project are to stimulate private investment, pursue institutional and structural reforms, and preserve macroeconomic balances.
Since its implementation, the project has raised taxes on cigarettes, decreased some notary fees, raised vehicle circulation fees, and increased the subsidy fund.
Calculating budget deficit and surplus
Budget deficits arise when state spending outweighs state resources.
Total state resources reached MAD 236.4 billion during the first half of 2019. This figure is comprised of ordinary revenue (52.7%), medium and long-term debt receipts (26.8%), Special Accounts of the Treasury receipts (20%), and the revenues of the state services managed autonomously (0.5%).
Total state expenses for the first half of 2019 amounted to MAD 223.1 billion. This figure is comprised of ordinary state expenses (54.7%), capital expenditure (14.5%), Special Accounts of the Treasury emissions (17.9%), and debt amortization (12.6%).
Total state resources outweighed total state expenses in Morocco for the first six months of the year. Based on these figures, the 2019 Finance Act has generated a surplus of resources over expenses. The surplus amounts to MAD 13.3 billion.
However, calculating a state’s budget balance uses only ordinary revenue and ordinary expenses.
Morocco has an ordinary resource balance of MAD 173.2 billion, while ordinary expenses total MAD 195 billion. The difference between the two figures is the budget deficit, which amounts to MAD 21.8 billion.
Budget balances from the first half of this year have met the goals of the 2019 Finance Act.
