Morocco’s Spending on Cooking Gas, Sugar Subsidies Hits $700 million

Morocco’s spending on cooking gas and sugar subsidies rose sharply to nearly $700 million in the first half of 2017, compared to $481 million in 2016, the subsidy fund, Caisse de Compensation, said.

During the first half of 2017, spending on cooking gas increased 70 percent year-on-year from $310 million to $525 million, while spending on sugar subsidies slightly increased from $171 million to $172 million.

The increase was mainly due to a rise both in gas imports and domestic consumption.

In late 2014, Morocco eliminated subsidies for gasoline, diesel, and fuel oil, dramatically reducing outlays that weighted on the country’s budget and current account. Subsidies on butane gas and certain food products remain in place

By the end of 2016, following the elimination of subsidies on gasoline, diesel and industrial fuel, the budget deficit was curbed to 3.5 percent of GDP from 5.6 percent in 2011.

Ending subsidies for fuel as well as curbing public sector employment reduced significantly the country’s resort to foreign debt, of which 75% is in Euro.