By: AGBI

Morocco is reportedly planning to increase its budget to mitigate the impact of higher energy costs resulting from the Middle East conflict.

The 2026 budget is likely to be raised by MAD20 billion ($2 billion), Reuters reported, citing an unidentified government official.

The additional spending will support the local economy as the country relies mostly on imported oil, gas and coal. Morocco does not have its own oil refining capacity.

Its budget deficit rose to MAD16 billion by the end of April, compared to MAD12 billion during the same period last year, Morocco World News reported, quoting the public finance bulletin.

Revenues reached MAD154.3 billion, up 7 percent year on year on higher direct and indirect taxes, as well as customs duties. However, non-tax revenues fell by 21 percent.

Expenditures stood at MAD219 billion by the end of April, up 12 percent annually.

This week, the budget minister Fouzi Lekjaa said that Morocco was allocating MAD3 billion per month to subsidise spiralling energy prices following the closure of the Strait of Hormuz.

Oil prices have jumped 46 percent since the beginning of the Iran conflict, he said.

Officials said in early 2025 that there would be a large increase in expenditure to fund infrastructure development for the 2030 Fifa World Cup, which Morocco is to co-host with Spain and Portugal.