Morocco’s spending on subsidies more than halved in first quarter this year

Spending as part of the compensation fund subsidizing the prices of fuel, wheat, sugar, and butane gas more than halved to 4.5 billion dirhams in the first quarter this year, auguring well for state finances, according to the finance ministry.

Subsidies including cash handouts to transport professionals stood at 44 billion dirhams last year due to soaring prices in the international market.

But as prices return to their normal levels, the government considers scrapping subsidies to transport professionals, a finance ministry source told Medias24.

The government has budgeted 26 billion dirhams for the subsidies fund this year, In view of the drop in prices, total spending by the compensation fund is expected to be lower this year.

The drop in prices in the international market is partly due to monetary tightening with central banks all over the world raising their key rates as well as low growth rates. This means a drop in demand and a consequent drop in prices.