Morocco's pension deficit, debt-to-GDP ratio skyrocket, causing concerns

President of Morocco’s Court of Auditors, Zineb El Adaoui, has sounded the alarm about the country’s pension system, warning of a growing deficit.

The Moroccan Pension Fund’s shortfall has reached 5.12 billion dirhams, with reserves dropping to 65.84 billion, a decrease of 10.7 billion. El Adaoui, is calling for immediate action to reform the pension system.

During a parliamentary session on Tuesday to present the Supreme Council of Accounts’ report for 2021, El Adaoui, also noted that the national economy has shown resilience in the face of global turmoil.

Tax revenues increased by 17.4% in 2022 compared to the previous year, while non-tax revenue rose by 28.9%, which helped cover the increase in expenses.

El Adaoui also highlighted that the treasury deficit has remained relatively controlled, dropping to 5.1% of gross domestic product, a 0.4% improvement from 2021.

However, the country’s total debt has increased from 68.9% to 96.8% of GDP between 2021 and 2022, with domestic debt accounting for 75.9% of the total.

On the positive side, exports increased by 30.01%, remittances from Moroccans living abroad rose by 16%, and travel revenues recovered gradually, recording a surplus of around 74 billion dirhams.

Morocco remained an attractive destination for foreign investors, with net foreign direct investment increasing by 6.8%.

Despite the country’s positive economic indicators, Morocco faced inflationary pressures of 6.6% in 2022, driven by rising energy and food prices and inflation in major trading partners. Nonetheless, Morocco’s overall inflation rate remained below that of neighboring countries such as Egypt, which recorded 13.8%.