Morocco expects stable 2027 fiscal deficit despite tax cuts

what happened

Morocco expects its fiscal deficit to hold at 3% of GDP in 2027, even as spending on social programmes rises and some taxes are cut. Finance and economy minister Fouzi Lekjaa, newly appointed, said so on Friday while presenting the 2027 draft budget to parliament. He forecast growth of 3.7% next year, down from 4.7% this year, assuming an average harvest.

The government plans to spend 62 billion dirhams ($6.3 billion) on better social services and purchasing power. Salaries below 10,000 dirhams a month would be exempt from income tax, and the package also includes pension increases, aid for needy families and electricity subsidies. Public debt is forecast to fall to 66.9% of GDP from 67.5%.

why it matters

For investors, the key signals are fiscal discipline and borrowing structure: the financing requirement is set to drop 7.4% to 159 billion dirhams, with external and domestic borrowing depending on market conditions. A proposed rise in the tax rate on fuel distributors' profits above 100 million dirhams to 40% would affect a sector previously sanctioned for anti-competitive practices.

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