The coronavirus outbreak has caused a surge in spending and a drop in revenues for state coffers pushing the government to review the targets and spending schemes under the 2020 budget while maintaining priority for social spending.
The administration has adopted austerity measures to reduce unnecessary spending saving some $200 million that was scheduled for conferences, seminars and events, Finance Minister Mohamed Benchaaboun told Upper House members.
Despite a drop in state revenue by $4 billion, the government has earmarked some $1.5 billion to back enterprises including $500 million to facilitate access to loans.
No cuts affected commitments for social services including education, health and efforts to reduce social and territorial disparities, he said.
In this respect, 1.1 billion were earmarked for social dialogue, which consists in large part in implementing wage hike commitments, while 1.2 billion will be spent on support to students and the national initiative for human development.
The compensation fund which subsidies prices of wheat, sugar and cooking gas will receive $1.2 billion he said.
He also recalled cash handouts to 70% of Moroccan households during the pandemic.
In total, $4.8 billion was mobilized to support the needy including people with special needs and widows equaling 4.5% of Morocco’s GDP, one of the highest social spending rates in the world, he said.
The coronavirus has hit key economic sectors in Morocco including tourism with the Moroccan economy bracing for a contraction of 5% and a fiscal deficit of 7.5%.
Morocco so far mobilized $5 billion in foreign debt to finance its balance of payments.