RABAT, October 24, 2026 (DAILYNWZ) — Morocco expects to hold its fiscal deficit at 3% of gross domestic product in 2027 despite tax cuts and increased spending on social programmes, while economic growth is forecast to slow to 3.7%, Finance and Economy Minister Fouzi Lekjaa said on Friday.
Presenting the draft budget to parliament, Lekjaa said the government expected growth of 4.7% this year, assuming an average agricultural season, before slowing next year.
The budget reflects the priorities of a new government coalition formed last week after the September 23 elections, with a focus on household purchasing power, public services and youth employment. The shift comes a year after Gen Z protests and the migration crisis involving Ceuta in July.
Lekjaa said previous social policies had been undermined by an economic model that favoured market forces over regulation, allowing monopolistic practices, rent-seeking and short-term profit-making to flourish.
“Savage capitalism and neo-liberalism” had been at the heart of social tensions, he said, calling for a stronger state role in fighting corruption, conflicts of interest and monopolies while protecting the country’s food and energy sovereignty.
The government plans to allocate 62 billion dirhams ($6.3 billion) in 2027 to improve social services, support purchasing power and reduce inequality, Lekjaa said.
Measures include changes to the distribution of basic goods, initiatives to promote youth employment and an income-tax exemption for salaries below 10,000 dirhams a month. The exemption would cover 87% of employees, he said. The package also includes pension increases, more financial assistance for needy families and electricity subsidies.
Under the draft budget, health spending would rise 7% to 45.5 billion dirhams, while education expenditure would increase 4.6% to 121 billion dirhams.
The draft also authorises defence expenditure commitments of up to 190.5 billion dirhams. Public debt is projected to fall to 66.9% of GDP in 2027, from 67.5% this year, according to the budget document.
On taxation, the government proposes raising the rate to 40% on profits exceeding 100 million dirhams earned by fuel distribution companies. The sector has previously faced sanctions from competition authorities over anti-competitive practices. The draft also raises excise taxes on soft drinks, alcoholic beverages, cigarettes and e-cigarettes.
Morocco’s financing requirement is expected to decline 7.4% to 159 billion dirhams next year. The government plans to balance domestic and external borrowing “depending on market conditions,” the draft budget said.