The budget deficit at 14 billion dirhams at the end of May

The situation of Treasury expenses and resources at the end of May 2022 shows a budget deficit of 14 billion dirhams (MMDH), against 25 billion dirhams a year earlier, indicates the Ministry of Economy and Finance.

This development covers an increase in revenue (+25.1 billion dirhams) greater than that of overall expenditure (+14.1 billion dirhams), indicates the ministry which has just published the situation of the expenses and resources of the Treasury (SCRT) for the month of May 2022.

Revenue recorded, on a net basis of tax refunds, reliefs and refunds, an increase of nearly 25.1%, compared to the end of May 2021, and an achievement rate of 45% compared to the budget law forecasts. (LF), specifies the same source. For their part, tax revenues showed good performance overall, with an increase of 17.8 billion dirhams or 20.5%, thus recording an achievement rate of 46.8%, despite the continuation of the effort to refund VAT credits, adds the ministry, noting that tax refunds, reliefs and refunds, including the part borne by local authorities, thus reached an amount of 7.4 billion dirhams, against 5.1 billion dirhams at end of May 2021.

For their part, non-tax revenue amounted to 12.5 billion dirhams, up by 7 billion dirhams, while revenue from public establishments and enterprises amounted to 3.7 billion dirhams, against 1.9 billion dirhams at the end of the year. May 2021, including 2 billion dirhams paid by OCP, 1.2 billion dirhams by the National Agency for Land Registry, Cadastre and Cartography and 356 million dirhams (MDH) by Bank Al-Maghrib. “Other receipts” amounted to 8.8 billion dirhams, including 5.2 billion dirhams under “innovative financing”, 2.7 billion dirhams under the products of ministries, 380 million dirhams from CCG donations and 347 million dirhams under competition fund, adds the ministry.

The execution of ordinary expenditure shows an increase of nearly 17.3 billion dirhams (+16.8%) and an execution rate of 46%. This change compared to the end of May 2021 is mainly due to the increase in compensation costs (+9 billion dirhams) and expenses relating to goods and services (+7.9 billion dirhams).

The increase in compensation expenses is attributable, in particular, to the rise in the price of butane gas, which reached an average of $879/T, compared to nearly $520/T at the end of May 2021. These expenses reached 16, 6 billion dirhams, an execution rate of 97.7%. And to emphasize that these charges include subsidies granted to professionals in the transport sector for an amount of 1.1 billion dirhams, and this, within the framework of the measures decided by the Government to deal with the increase in the price of energy products.

The increase in expenditure on goods and services covers an amount of 4.6 billion dirhams under “other goods and services” and 3.3 billion dirhams under staff costs, the ministry said.

Debt interest charges increased by 375 million dirhams to stand at 10.7 billion dirhams, covering an increase in domestic debt interest (+579 million dirhams) and a decline in those relating to the external debt (-204 MDH).

These changes in ordinary revenue and expenditure resulted in a negative ordinary balance of 2.1 billion dirhams, against -9.9 billion dirhams at the end of May 2021.

With regard to investment expenditure, issues reached 32.8 billion dirhams, against 28.1 billion dirhams a year earlier. Compared to the LF 2022 forecasts, their achievement rate was almost 42%.

The special Treasury accounts (CST), for their part, generated a surplus balance of nearly 20.9 billion dirhams, against 13 billion dirhams at the end of May 2021. The resources of the special Treasury accounts (CST) take into account an amount 6.3 billion dirhams corresponding to the proceeds of the Social Solidarity Contribution on profits and income, allocated to the Social Protection and Social Cohesion Support Fund, compared to 3.4 billion dirhams at the end of May 2021.

Given these developments and a reduction in pending operations of 9.7 billion dirhams, the situation of Treasury expenses and resources reveals a financing requirement of around 23.7 billion dirhams.

This need, increased by net flows of investments on the money market (+500 million dirhams) and external financing (+0.9 billion dirhams), was covered mainly by recourse to the domestic debt market for a net flow of 14. 2 billion dirhams, notes the same source. The flow of domestic debt covers subscriptions for an amount of nearly 60.5 billion dirhams, against 49.8 billion dirhams a year earlier, and principal repayments for 46.3 billion dirhams, against 43.4 billion dirhams. That of external debt covers drawings of around 3.5 billion dirhams, against 8 billion dirhams at the end of May 2021, and amortizations of 4.4 billion dirhams, against 4.3 billion dirhams a year earlier.

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