Stronger-than-expected tax revenues have given Morocco’s Treasury greater financial flexibility in early 2026, easing pressure on government borrowing and improving the country’s fiscal position ahead of a potentially demanding second half of the year.
According to an analysis by Attijari Global Research (AGR), Morocco recorded a budget surplus of 5.1 billion dirhams (US$520 million) at the end of March, sharply higher than the 770 million dirham surplus posted during the same period in 2025.
The improvement was largely driven by higher corporate tax and income tax receipts, reflecting resilient economic activity and stronger fiscal collections.
The healthier fiscal position has enabled the Treasury to scale back its reliance on domestic debt markets, adopting a more selective approach to bond issuance.
AGR said the Treasury accepted less than 10 percent of investor bids during April bond auctions — described as a historic low — as authorities chose to borrow only at the most favourable rates available.
The move has helped reduce borrowing costs and contributed to stabilising Morocco’s yield curve, particularly for short- and medium-term maturities.
Analysts say the stronger revenue performance offers Rabat valuable breathing space as it balances infrastructure spending, debt obligations and political pressures ahead of future elections.
“Improved revenues are giving the Treasury more room to manage financing conditions carefully rather than borrowing aggressively,” said economist Nadia El Mansouri, a Casablanca-based fiscal analyst.
Despite the stronger start to the year, Morocco still faces substantial financing requirements for the remainder of 2026.
AGR estimates the Treasury’s gross domestic financing needs at around 138.2 billion dirhams for the rest of the year.
That figure includes roughly 60.6 billion dirhams linked to the projected budget deficit and financing needs under the 2026 Finance Law, as well as 77.6 billion dirhams in debt repayments falling due this year.
Most of the financing — approximately 112.5 billion dirhams — is expected to come from the domestic market.
AGR projects the Treasury will raise around 12.5 billion dirhams per month through local borrowing, up from previous estimates as infrastructure and capital spending accelerate.
Morocco has launched a series of major infrastructure and industrial projects in recent years aimed at boosting growth, strengthening logistics networks and supporting preparations linked to future international sporting events and trade expansion.
At the same time, authorities are seeking to maintain fiscal discipline while managing public debt levels.
AGR forecasts Morocco’s total Treasury debt will rise to around 1.21 trillion dirhams by the end of 2026, compared with 1.16 trillion dirhams in 2025.
Domestic debt is expected to increase by 4.5 percent to 887 billion dirhams, while external debt is projected to rise 5.7 percent to 324 billion dirhams.
Using the government’s projected economic growth rate of 4.6 percent for 2026, AGR estimates Treasury debt will represent approximately 65.5 percent of gross domestic product by year-end.
The budget deficit is forecast at 55.4 billion dirhams, equivalent to around 3 percent of GDP.
Morocco has pursued gradual fiscal consolidation in recent years while attempting to shield households from inflationary pressures and maintain investment in social programmes and infrastructure.
The country’s economy has shown signs of recovery after successive droughts and external shocks linked to global inflation and geopolitical tensions.
Agriculture, tourism and industrial exports — particularly automotive and aerospace manufacturing — have all contributed to improved revenue collection.
Economists caution, however, that fiscal pressures could intensify later in the year as government spending rises in the run-up to elections and major public investment projects gather pace.
Still, analysts say the first-quarter surplus has significantly improved the Treasury’s starting position compared with a year ago.
“The government enters the second half of 2026 with a stronger financial cushion than it had previously,” El Mansouri said.
