Morocco’s government plans to maintain its fiscal deficit at 3 percent of gross domestic product (GDP) in 2027 despite increased spending on social programs and tax reductions, Finance and Economy Minister Fouzi Lekjaa announced. The announcement was made during his address to members of parliament.

The economy is projected to expand by 3.7 percent next year, a slowdown from an estimated growth rate of 4.7 percent expected this year. These projections assume average agricultural output. Lekjaa highlighted that the government intends to allocate 62 billion dirhams (approximately $6.3 billion) towards initiatives aimed at enhancing social services, improving purchasing power, and addressing economic inequalities.

Key measures include reforming the distribution systems for essential commodities, fostering job opportunities for young people, and exempting salaries under 10,000 dirhams per month from income tax. According to Lekjaa, this exemption would benefit roughly 87 percent of the workforce.

The government’s draft budget also calls for increased spending in critical sectors. Health expenditures are set to rise by 7 percent to 45.5 billion dirhams, while education funding would increase by 4.8 percent to 121 billion dirhams. Defense commitments are authorized up to 190.5 billion dirhams.

Public debt is expected to decrease slightly, falling to 66.9 percent of GDP in 2027 from 67.5 percent in the current year. Additionally, the budget proposal includes raising the tax rate on profits exceeding 100 million dirhams earned by fuel distribution companies to 40 percent.

These fiscal measures reflect Morocco’s efforts to balance social welfare priorities with maintaining fiscal discipline amid a slower growth outlook for the coming year.