Morocco Allocates $2bn To Ease Impact Of Global Energy Market Disruptions

Morocco earmarks $2 billion to cushion households against rising energy costs and economic shocks linked to Middle East tensions.

Morocco plans to inject an additional 20 billion dirhams ($2 billion) into its 2026 budget to protect households and stabilise the economy against growing energy shocks linked to instability in the Middle East.

According to a government source cited by Reuters, the extra allocation will support subsidy programmes covering cooking gas, electricity, and public transport, sectors heavily exposed to global fuel price fluctuations.

Government spokesperson Mustapha Baitas said the funding would help preserve domestic price stability and protect citizens’ purchasing power amid rising geopolitical tensions affecting international energy markets.

The move comes as Morocco remains heavily dependent on imported fuel following the closure of the country’s only oil refinery, the Samir refinery, several years ago.

That dependence has left the North African country vulnerable to global oil market volatility, especially as conflict in the Middle East continues to disrupt supply chains, increase shipping insurance costs, and raise uncertainty around key maritime trade routes.

Authorities in Rabat have maintained energy-related support measures despite pressure on public finances and global efforts by many governments to scale back subsidies after the post-pandemic commodity price surge.

Budget Minister Fouzi Lekjaa recently disclosed that government efforts to stabilise electricity tariffs and public transport fares currently cost about 648 million dirhams ($70.6 million) every month.

Part of the new budget provision will also go toward post-flood recovery efforts after severe flooding damaged infrastructure, roads, and homes across northern Morocco earlier this year.

Despite the additional spending burden, Moroccan authorities remain optimistic about the country’s economic outlook.

The government now projects economic growth of 5.3 per cent this year, up from an earlier estimate of 4.6 per cent, largely driven by improved agricultural output following strong rainfall after years of drought.

Agriculture remains one of Morocco’s largest employers and a major contributor to domestic demand and economic stability.

Officials also expect the fiscal deficit to narrow to three per cent of Gross Domestic Product (GDP), while government debt is projected to decline to about 66 per cent of GDP as stronger economic activity boosts tax revenues.

Morocco has in recent years positioned itself as a regional hub for industrial production and renewable energy investment, attracting major projects in automotive manufacturing, aerospace, and green hydrogen.

However, economists warn that the country’s continued reliance on imported energy leaves it exposed to geopolitical disruptions beyond its control.