Morocco is set to significantly raise public expenditure as tensions in the Middle East fuel concerns over renewed energy shocks and rising inflation in economies heavily reliant on imports.
According to a government source quoted by Reuters, authorities intend to inject an additional 20 billion dirhams ($2 billion) into the 2026 national budget to cushion local prices, preserve consumers’ purchasing power and address wider economic threats linked to global uncertainty.
Government spokesperson Mustapha Baitas explained that the extra resources would sustain subsidy programmes for cooking gas, electricity and public transportation, areas especially vulnerable to fluctuations in international fuel costs.
The decision comes at a sensitive time for Morocco, which depends on imports for almost all of its energy consumption and has lacked local oil refining operations since the closure of the Samir refinery several years ago.
As a result, the North African nation remains highly exposed to external disruptions whenever global oil and gas supplies face pressure.
International energy markets have experienced growing instability following the escalation of the Middle East conflict, a region that plays a critical role in worldwide crude oil exports and shipping networks.
Rising insurance premiums, fears over supply interruptions and uncertainty surrounding maritime trade routes have forced many fuel-importing nations to rethink subsidy policies and emergency expenditure strategies.
For Morocco, the situation is especially challenging because the government has spent years working to manage inflation while avoiding broader social unrest.
Officials have maintained subsidies for essential consumer sectors even as numerous countries scaled back energy support schemes after the surge in commodity prices that followed the pandemic.
Budget Minister Fouzi Lekjaa recently disclosed that efforts to keep electricity and public transport prices stable currently cost about 648 million dirhams ($70.6 million) each month.
A portion of the new funding package will also support reconstruction work after severe flooding hit northern Morocco earlier this year, causing damage to roads, homes and public infrastructure across several communities.
Despite mounting expenditure demands, Rabat projects economic growth to improve to 5.3% this year from the earlier 4.6%, driven largely by stronger agricultural output following plentiful rainfall.
The rebound represents a major recovery after prolonged drought conditions reduced harvests, weakened rural livelihoods and forced the country to import more food supplies.
Agriculture continues to play a vital role in Morocco’s economy, serving as both a major source of employment and a key contributor to domestic consumption.
Authorities further anticipate that the fiscal deficit will decline to 3% of gross domestic product, while public debt is expected to fall to roughly 66% of GDP, reflecting confidence that stronger tax income and economic expansion will absorb part of the extra spending burden.
Morocco has also intensified efforts to position itself as a regional centre for industry and renewable energy, drawing investment into automotive production, aerospace development and green hydrogen initiatives.
However, analysts warn that the country’s dependence on imported fuel still leaves it vulnerable to geopolitical disruptions outside its control.
The revised budget plan highlights the growing pressure on governments across Africa and other developing regions to balance fiscal responsibility with the need to protect citizens from the impact of global economic crises.