Morocco allocates $2bn to counter Middle East conflict impact
Morocco plans to inject an additional 20 billion dirhams ($2 billion) into its 2026 budget to shield the domestic economy from the impact of the escalating conflict in the Middle East, according to Reuters on May 16, 2026.
The emergency budget adjustment comes as rising regional tensions continue to disrupt global energy markets, increasing pressure on import-dependent economies such as Morocco, which relies heavily on foreign oil, gas and coal supplies and lacks domestic oil refining capacity.
Government spokesperson Mustapha Baitas said the additional funding is intended to strengthen reserve measures designed to protect citizens’ purchasing power if the regional crisis persists.
The measures will include subsidies aimed at stabilising the prices of cooking gas, electricity and public transport, sectors already under strain from imported inflation and volatile global energy prices.
According to the government, part of the additional funding will also be directed toward covering costs linked to severe floods that affected northern Morocco during the winter, as well as other unforeseen expenditures tied to the broader international economic climate.
The decision highlights Morocco’s growing concern over the economic fallout from instability across the Middle East, particularly after disruptions to energy supply chains triggered renewed volatility in international oil and gas markets.
Despite these pressures, Rabat remains optimistic about economic growth in 2026. The government expects the Moroccan economy to expand by 5.3 percent this year, up from 4.6 percent in 2025, supported largely by a recovery in the agricultural sector following abundant rainfall that ended years of severe drought conditions.
Officials also said the government aims to reduce the fiscal deficit to 3 percent of gross domestic product while lowering public debt levels to around 66 percent of GDP through improved tax revenues and stronger economic performance.
Budget Minister Fouzi Lekjaa said last month that subsidies used to stabilise transport and electricity prices were already costing the state roughly 648 million dirhams ($70.6 million) each month.
The additional spending package reflects broader efforts by Moroccan authorities to balance social stability with economic management at a time of mounting geopolitical uncertainty and increasing global inflationary pressures.
Morocco has intensified subsidy and support programmes in recent years to mitigate the effects of inflation, drought and external economic shocks, while attempting to preserve fiscal discipline and sustain growth.
Maghrebi cannot verify Reuters claims in its reports from Morocco due to the international news organisation adopting the local, self censorship style of reporting only news which pleases the government rather than previously holding it to account with more journalistic reporting.
Reuters, Maghrebi.org
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