Budget deficit improves in H1, notes AGR

The budget deficit stood at 27.5 billion dirhams (MMDH) in the first half of 2024 (S1-2024), an improvement of 368 million dirhams (MDH) compared to the same period of the previous year, according to Attijari Global Research (AGR).

“The execution of the State budget during the first half of 2024 resulted in a deficit of 27.5 billion dirhams, an improvement of 368 million dirhams compared to the same period in 2023,” indicates AGR in its “Budget Focus – Fixed Income” report for the month of June.

According to the same source, the analysis of the evolution of ordinary Treasury expenditures shows, on the one hand, that the easing of financing conditions had an impact on the interest charges of the Treasury’s domestic debt (-2 billion dirhams), and, on the other hand, a decrease in compensation expenses from 1.3 billion dirhams to 14.7 billion dirhams, mainly due to the decline in the butane gas charge (-1.1 billion dirhams).

Concerning tax revenues, they showed a sustained increase of 14.9 billion dirhams, mainly attributable to changes in corporate tax (+4.7 billion dirhams), value added tax (+4.7 billion dirhams) and income tax (+2.5 billion dirhams).

Furthermore, in light of the budgetary developments provided for by the Finance Law (LF) 2024 and the continuation of the Treasury’s strategy oriented towards external financing, the Treasury should control its deficit in 2024 at 62 billion dirhams, or 4% of GDP.

The Treasury debt is expected to continue to rise in 2024, reaching 1,078 billion dirhams compared to 1,017 billion dirhams in 2023, analysts estimate. In addition, assuming full realization of the external drawings provided for in the 2024 Finance Act, i.e. 70 billion dirhams, the domestic debt is expected to reach 774 billion dirhams in 2024, up 1.4% compared to its level at the end of 2023, while the external debt is expected to increase by 20.2% to 304 billion dirhams in 2024.

Taking into account the forecasts of the 2024 Finance Act in terms of growth and debt, the Treasury should control its debt ratio at around 70% in 2024. The latter would have reached 67.6% at the end of June 2024.

LNT with MAP