Optimism about the ability to control the budget deficit of the public coffers despite the pressure of the liquidation of expenses

The Al-Tijari Research Center reported that the public treasury can control its budget deficit in 2022 below 6 percent of gross domestic product. And the center indicated, in its latest report “Research Report-Fixed Income”, entitled “Towards the continued rise in rates in 2022”, that “in the end, we remain convinced of the ability of public coffers to control their budget deficit in 2022 below 6 percent of production.” rough inside.

The center specified that the Ministry of Economy and Finance reconsidered its deficit and growth forecasts for this year, taking into account the recent evolution, to 5.3 percent of the gross domestic product and 1.5 percent, respectively.

The Center indicated that, taking into account the significant increase in compensation expenses and additional support to the transport and tourism sectors, normal expenses are expected to increase in 2022. According to analysts, the latter may reach 280,000 million dirhams, an increase of 17 billion dirhams. compared to the Finance Law.

On this basis, and taking advantage of the significant improvement in tax revenue, last June the State opened additional credits of 16,000 million dirhams for operating expenses in order to continue with the support.

In the event of a further increase in the level of the compensation fund, the state can operate two levers, especially at the level of income: The public treasury can develop more innovative tools, the last of which allowed the collection of 12 billion dirhams in 2021, in line with the expectations of the 2021 Finance Law. The mechanisms in 2022 will provide more than 20 billion dirhams, compared to the 12 billion foreseen in the Finance Law for the year 2022.

At the expenditure level, the State can, in accordance with the requirements of the 2022 Finance Law, freeze around 14 percent of the budget for investment spending, that is, the possibility of saving around 15 billion dirhams.

According to the center’s analysts, apart from the acceleration of inflationary pressures, some of the assumptions on which the 2022 Finance Law was based are no longer valid, since they considered that the future orientation of the public treasury towards the internal market faces two main challenges. The first is related to the growing pressures on the state budget, mainly liquidation expenses.

The second challenge refers to decisions related to the sources of financing, since after completing an external financing of more than 60,000 million dirhams in 2020, mainly thanks to two international subscriptions (40,000 million dirhams), the Treasury has not made Significant foreign exchange subscriptions since.