Budget deficit projected at 6.1% of GDP in 2022, according to the HCP

Morocco’s budget deficit is expected to be 6.1% of gross domestic product (GDP) for the year 2022, according to consumers from the High Commission for Planning (HCP).

“Fiscal policy in 2022 should remain in favor of supporting the national economy by maintaining a budget deficit of nearly 6.1% of GDP”, notes the HCP which has just published the Forecast Economic Budget (BEP) 2022.

This orientation is combined with an increase in investment expenditure, which should reach 7.2%, and incompressible ordinary expenditure, which should continue its upward trend to represent nearly 21.7% of GDP. This increase, specifies the HCP, would be carried by the increase in expenditure on the wage bill to 12.1% of GDP and expenditure on other goods and services (5.6% of GDP), noting that the compensation charge should be around 1.6% of GDP, assuming that the average price of butane gas continues to rise.

In addition, the HCP notes that the ordinary balance should recover in 2022, under the effect of a continuous increase in tax revenue (18.5% of GDP), in connection with the resumption of economic activity, including that this prospect would also be reinforced by the introduction of certain taxes and the increase in the domestic consumption tax (TIC) and import duties applied to certain products.

Corporate tax is expected to return to its pre-crisis growth rate thanks to the improvement in corporate balance sheets in 2021. Similarly, income tax and tax revenues on added value benefiting from the expected increase in demand.

The HCP also points out that to meet its financing needs, the Treasury would have recourse to domestic and external borrowing, noting, in this context, that projections for 2022 showed that the Treasury’s debt ratio should increase to 78 , 5% of GDP, of which 60% of GDP is internal debt and 18.5% external debt.

The consequences of the Covid-19 crisis have also revealed the vulnerability of public finances to exogenous shocks and the possibility of creating budgetary spaces, notes the HCP, estimating that with an external debt guaranteed by the State which should stabilize at nearly from 14.7% of GDP in 2022, the overall public debt ratio, which is constantly increasing, should reach 93.2% of GDP in 2022, against 90.3% in 2021.


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