Morocco: Budget Deficit Remains "Under Control" (WB)

In Morocco, the budget deficit recorded in 2020 remains “under control” compared to most of its neighboring countries, which testifies to the tax prudence adopted to face the crisis linked to the Covid-19 pandemic, said director of the Maghreb and Malta department at the World Bank (WB), Jesko S. Hentschel.

“As in most countries around the world, the Covid-19 pandemic has and will have important consequences on public finances. In Morocco, the budget deficit recorded in 2020 remains, however, under control compared to most of its neighboring countries, which testifies to the tax prudence with which the authorities have faced this crisis”, said Jesko S. Hentschel in an interview with MAP.

Thanks to the solidity of macroeconomic policies in Morocco as well as its close relation with multilateral institutions, Hentschel said that the Kingdom has been able to access significant private and public external financing over the past year, which has certainly helped to mitigate the impact of the crisis.

“Despite its increase during the pandemic, the Moroccan public debt remains sustainable,” he added, stressing that the Kingdom’s debt structure has certain characteristics that limit its vulnerability, such as the low short-term debt, and the relatively low proportion of external and foreign exchange debt.

However, to maintain this level of sustainability, it will be necessary for the Kingdom to pursue its objective of gradually reducing its budget deficit in the years to come. This should also involve a sustained effort to improve the efficiency of spending, broaden the tax base and make tax collection more efficient and fair, Hentschel said.