RABAT, May 15 – Morocco plans to inject an additional 20 billion dirhams ($2 billion) into its 2026 budget to shield households and key sectors from the economic fallout of the escalating Middle East conflict, as rising energy disruption threatens to push up domestic costs.
Government spokesman Mustapha Baitas said the budget adjustment would create reserve funding to manage prolonged external shocks, particularly to protect citizens’ purchasing power as Morocco faces mounting pressure from imported fuel and commodity costs.
The North African economy remains highly exposed because it imports nearly all of its oil, gas and coal needs and lacks domestic refining capacity, making global supply disruptions especially costly.
The added spending will largely go toward subsidies aimed at keeping cooking gas, electricity tariffs and public transport prices stable, while also covering flood-related recovery costs in northern Morocco and other unexpected pressures tied to the broader international economic climate.
Budget Minister Fouzi Lekjaa said transport and electricity support measures alone currently cost about 648 million dirhams ($70.6 million) each month.
Despite inflation concerns, Rabat expects economic growth to accelerate to 5.3% this year from 4.6% in 2025, helped by stronger agricultural output after abundant rainfall ended a seven-year drought.
The government also forecasts the fiscal deficit will narrow to 3% of gross domestic product, down by 0.5 percentage points, while public debt is projected to ease to 66% of GDP on stronger tax revenue and improved growth.
