Morocco To Increase Public Expenditure For 2010

Morocco is to increase its public works spending by 20.4% to Moroccan Dirhams (MAD) 162.6bn ($21.2bn) in 2010, according to its draft budget for next year. State investment is projected to grow by 19%, to MAD53.8bn ($7.0bn) from MAD45.2 ($5.9bn) in 2009. Important projects for 2010 include the expansion of wind farms in Tangiers and Tarfaya. Also set for expansion are the Jorf Lasfar coal-fired power station, a combined-cycle power station in Ain Beni Mathar, and a gas-fired power plant at Kenitra. In total, these expansions by state power utility l’Office National de l’Electricité (ONE) are expected to add a combined 1.2gw of power generation capacity at a cost of MAD10bn ($1.3bn). The state water utility, Office National de l’Eau Potable (ONEP), will increase its spending to MAD4.1bn ($0.53bn), from MAD3.3bn ($0.43bn) in 2009, to build new dams and water treatment plants. The draft figures also indicate increases in the budgets of the justice system, to $0.41bn, as well as to the educational system, which will see an increase of 34% since 2008 to $6.58bn.

The draft budget is based on a projected average oil price of $75/B in 2010, with the government expecting the economy to grow by 3.5%, down from 5.3% this year and 5.6% in 2008. The figures are consistent with recent IMF projections, which indicated that Morocco’s GDP growth would slow to 5% in 2009 and 3.2% in 2010 (MEES, 5 October). Though the budget deficit for 2009 is now expected to be smaller than previous government estimates, at 2.7% rather than 2.9%, it will widen to 4% in 2010, the Ministry of Economy and Finance said. Inflation is expected to stay steady at 2% in both 2009 and 2010, down from 2008’s figure of 3.9%.

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