Morocco’s year-end budget deficit for 2023 is anticipated to be around 4.5% of the kingdom’s gross domestic product (GDP) in line with the target set by Appropriation Bill 2023, according to the three-year overall budget for 2024-2026 published on Wednesday by the Ministry of the Economy and Finance.
The estimate deficit takes into account the cost of measures deployed by Morocco to mitigate the effects of inflationary pressures as well as of the ongoing drought and the September 8 earthquake.
For the first nine months of this year, the Treasury’s account showed a financing requirement of nearly 45.8 Bln MAD, assuming a budget deficit of 32.4 Bln MAD and a reduction in spending operations of 13.4 Bln MAD.
The financing requirement, plus debt repayments totalling 192.6 Bln MAD, including 185.1 Bln MAD for domestic debt, resulted in a gross borrowing requirement of 238.4 Bln MAD, according to the Ministry.
The figure for repayment of domestic debt reflects the concentration of debt issuances at the end of 2022 and the beginning of 2023 on short-term maturities, reflecting in particular investors’ preference for these maturities in a context of rising interest rates.
The level of financing amounted to nearly 265.8 Bln MAD, including 222.7 Bln MAD on the domestic market and nearly 39.3 Bln MAD in external instruments, including 25.8 Bln MAD raised on the international financial market.
The surplus of resources mobilized for covering the Treasury’s debt, in particular those resulting from short-term debt issues, is part of the Treasury’s proactive debt management, the objective of which is to reduce the refinancing risk in a context of volatile financing conditions on the domestic market, according to the ministry.
The cash surplus is invested as part of an active cash management program to optimize the Treasury’s financing costs.