Morocco’s Finance Minister Nizar Baraka introduced a 2013 budget that set spending at 298 billion dirhams ($34.7 billion) and targeted a deficit of about 5 percent, as the North African country looks to stave off unrest that has rocked other Arab nations.
Revenue for 2013 was projected at 283 billion dirhams under the budget put to parliament today. The government will continue spending heavily on energy and staple subsidies, estimating expenditure to be between 45.9 billion and 49.3 billion dirhams. In 2012, the total spending on subsidies may total 53 billion dirhams. Economic growth was forecast at 4.5 percent in 2013.
“The restoration of a balanced budget is possible by optimizing the costs and improving the revenue,” Baraka told parliament.
Last year, the country’s budget deficit widened as the government boosted spending in an attempt to curtail economic challenges that helped spark uprisings elsewhere in the Arab world. The nation faces growing problems after a drought hit its harvest and amid concerns about the economic fallout from the euro-region crisis. Europe is Morocco’s biggest export market and the source of almost two-thirds of its tourists.
“Moroccan authorities are finding it more challenging to reduce the vulnerabilities created by the twin deficits in the context of a difficult external environment while maintaining Morocco’s traditional political and social stability,” ratings agency Standard & Poor’s said on Oct. 11 as it revised its outlook for the country’s debt to negative from stable.
Coalition parties that won last November’s elections, led by the Islamist Justice and Development party, raised taxes on alcohol in April for the first time since 2010 by 12 percent for beer and 43 percent on other alcoholic beverages. In June 2011, Morocco raised fuel prices by about 20 percent to cut spending on subsidies.
The 2013 budget was based on an oil price of $105 a barrel.