Casablanca – As of February 2025, Morocco’s budget deficit has significantly increased to $2.17 billion, compared to $391 million at the same time last year. This sharp rise in the deficit has been attributed to various factors, including higher public spending and lower-than-expected revenues in some key sectors, according to the General Treasury of the Kingdom (TGR).

Revenues and tax collections

The country’s gross ordinary revenues showed a 9.7% increase, reaching $5.83 billion compared to $5.32 billion in February 2024. The increase in revenues was mainly driven by higher direct taxes, which saw a 48.1% rise and amounted to approximately $1.65 billion. This was largely due to a one-time boost from the voluntary tax regularization operation, which contributed $391 million in additional revenues.

Furthermore, indirect taxes also contributed to revenue growth, increasing by 7.1% to $1.85 billion, driven by a 10% increase in domestic VAT. This positive trend was offset by a 6% decrease in customs duties and a substantial 58.5% drop in non-tax revenues, which primarily resulted from a 67% decline in revenue from state monopolies, down to $13.8 million from $42.9 million the previous year.

Expenditures and public spending

On the expenditure side, ordinary expenditures rose by 50.5%, amounting to $7.64 billion by the end of February 2025, compared to $5.06 billion the previous year. This increase was largely driven by a 49.6% rise in goods and services expenditures, which surged to $3.92 billion. The spike was mainly due to an increase in other goods and services expenses, which surged by 130.2%.

Other significant expenditure increases include a 37.2% rise in debt interest charges, which climbed to $721 million, as well as an increase in tax refund claims and reductions, which saw a 363.4% rise, reaching $128 million.

Additionally, the state reduced its spending on personnel costs by 0.8%, which amounted to $1.2 billion in February 2025. This was despite the overall increase in spending due to the rise in public sector expenses.

Balance and funding

As a result of the rising expenditures and the decrease in certain revenue streams, Morocco’s ordinary balance stood at a negative $1.88 billion at the end of February 2025, compared to a positive balance of $195 million in the same period last year.

To cover the increasing budgetary needs, the general budget expenditures amounted to $9.9 billion, up 41.6% from $7 billion at the end of February 2024. This increase was driven primarily by a 52.2% rise in operating expenses, a 1.3% increase in investment spending, and a 73.9% jump in budgeted debt charges.

Special accounts and SEGMA revenues

Special Treasury accounts (CST) generated revenues of $4.5 billion, with $1.16 billion coming from the general budget’s investment charges, slightly down from $1.18 billion in February 2024. The CST expenditures stood at $3.07 billion, which included $134 million for tax refunds and reductions.

The overall balance for all special Treasury accounts was $1.42 billion. Meanwhile, SEGMA (autonomous state-managed services) revenues rose by 61.7% to $47 million, while its expenditures decreased by 35.3%, totaling $1.1 million.

Morocco faces a growing budget deficit primarily due to rising public expenditures, particularly in the areas of goods, services, and debt-related costs. While tax revenues have shown positive growth, challenges such as the decline in non-tax revenues and customs duties remain. The government will likely need to increase its focus on controlling spending and boosting revenue generation in the coming months to address the widening fiscal gap.