Morocco’s budget deficit widens as spending outpaces revenue growth

Thursday 14 - 08:47

By: Dakir Madiha

Morocco’s budget deficit widens as spending outpaces revenue growth

Morocco recorded a budget deficit of MAD 15.5 billion by the end of April 2026, widening from MAD 11.8 billion during the same period a year earlier as public spending continued to accelerate despite stronger tax collection. The latest public finance data showed that rising operating and investment expenditures placed additional pressure on state finances during the first four months of the year.

The deficit figures incorporated a positive balance of MAD 27.9 billion generated by special Treasury accounts and autonomous state-managed services. Ordinary revenues reached MAD 154.3 billion, marking a 7% increase compared with April 2025. Tax receipts remained the main driver of revenue growth. Direct taxes climbed 9.8%, indirect taxes rose 11.3%, customs revenues increased 6.5%, while registration and stamp duties expanded by 11.5%. In contrast, non-tax revenues declined sharply by 20.6%, partially offsetting gains from taxation.

Government expenditures expanded at a faster pace than revenues. Spending issued under the general budget reached MAD 219.4 billion by the end of April, up 12.2% year-on-year. Operating expenditures increased by 14.4%, reflecting higher administrative and social costs, while investment spending surged 19.6% as Morocco continued financing infrastructure and development projects. Debt-related budget charges fell by 1.9%, largely due to a decline in principal repayments on domestic debt obligations.

Treasury data showed principal repayments dropped 7.1% to MAD 21.8 billion. The decrease stemmed mainly from a MAD 7.5 billion reduction in domestic debt amortization, although external debt amortization increased by MAD 5.9 billion. Interest payments on debt nonetheless climbed 6.1% to MAD 16.2 billion, illustrating the continued financial burden linked to borrowing costs and external financing conditions.

Budget implementation also accelerated during the period. Spending commitments reached MAD 369.9 billion, corresponding to a commitment rate of 41% compared with 39% one year earlier. The issuance rate on committed expenditures stood at 77%, slightly above the 76% recorded in April 2025. Despite the wider overall deficit, Morocco maintained a positive ordinary balance exceeding MAD 1.63 billion, supported by resilient tax revenues and controlled debt servicing.

Special Treasury accounts generated revenues of MAD 92.4 billion, including MAD 20.6 billion transferred from the common investment expenditure chapter. Expenditures from these accounts totaled MAD 65.5 billion, including MAD 3.1 billion dedicated to tax refunds, rebates and restitutions. The resulting balance reached MAD 26.9 billion, helping reduce pressure on the central budget.

State-managed autonomous services also posted stable financial results. Their revenues exceeded MAD 1.12 billion, representing an increase of 2.6%, while expenditures dropped 24.8% to MAD 176 million. By the end of April, ordinary revenues had achieved 36.7% of annual Finance Law projections, while ordinary spending execution stood at 39%. Investment expenditure implementation reached 33% of projected annual levels, reflecting sustained public investment momentum despite tighter fiscal conditions.