The government has allocated an additional MAD 16 billion to support the prices of butane gas and sugar, announced officials following today’s government council.
A draft decree relating to the opening of additional appropriations for the benefit of the operating budget and common costs, submitted by Minister Delegate in charge of the Budget Faouzi Lekjaa, was approved during a government council on Thursday.
This project comes to keep pace with the dynamics of the international market for subsidized products during the first five months of the current year, which witnessed important shifts and pressures driven by the desire for economic recovery after the pandemic, and major geo-political shift and disturbances in the world.
The aid aims to continue the government’s policy of protecting the purchasing power of citizens by maintaining the internal selling price of butane gas and ensuring the stability of sugar prices, and the consequent increase in clearing expenses compared to the appropriations opened in the 2022 Finance Law.
The new budget forecasts for compensation for this ongoing year show a need for more than MAD 32 billion, double the MAD 16 billion initially allocated for the 2022 Finance Bill, explained Lekjaa.
The Minister assured during a press conference subsequent to the council that “these additional expenses will not worsen the deficit.”
This increase is fueled by record inflation across international markets for products subsidized by the Moroccan state, namely gas, wheat and sugar.
In addition, in light of record spikes in fuel prices internationally, the aid to transportation workers, which requires an envelope of MAD 452 million per month, has just been renewed for a third round, forcing the government to increase its subsidies budget.
According to Lekjaa, “at the end of May, MAD 9.7 billion were spent to subsidize butane gas, MAD 3.3 billion for imported wheat and MAD 400 million for sugar.”
“We will therefore need an additional MAD 17 billion in the best case scenario, broken down as follows: MAD 9.8 billion for gas, MAD 6 billion for wheat and MAD 1.2 billion for sugar.”
The government can authorize its expenditures by decree in light of exceptional times, which enables the executive to make such financial decision without resorting to rectifying the Finance Bill, an option the Akhannouch government has been avoiding since the bill passed earlier this year.
Lekjaa assured that, despite this hindrance, macroeconomic balances will be maintained, thanks in particular to phosphate revenues.
“We will meet the challenge of finishing the year while maintaining subsidies without worsening the public deficit,” he concluded.
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