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Reforming Subsidies in Morocco

Author

Listed:
  • Verme, Paolo

    (World Bank)

  • El-Massnaoui, Khalid

    (World Bank)

  • Araar, Abdelkrim

    (World Bank)

Abstract

The cost of the subsidy system in Morocco peaked at 6.6 percent of gross domestic product (GDP) in 2012, an amount larger than the country’s total investment budget for that year. Direct subsidies to households in 2013 (October 2013 prices) are estimated at DH34.4 billion (US$4.1 billion, or 3.9 percent of GDP). Replacing direct subsidies with a universal per capita annual cash transfer of DH749 (US$90) would leave the poverty rate unchanged, while reducing direct subsidies to DH24.6 billion (2.8 percent of GDP). It is possible to reduce direct subsidies further by targeting only a part of the population, down to DH2.4 billion (0.3 percent of GDP), if only the poor were targeted. However, to implement selective targeting, the government of Morocco would need to substantially strengthen its social protection system.

Suggested Citation

  • Verme, Paolo & El-Massnaoui, Khalid & Araar, Abdelkrim, 2014. "Reforming Subsidies in Morocco," World Bank - Economic Premise, The World Bank, issue 134, pages 1-5, February.
    • Handle: RePEc:wbk:prmecp:ep134
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    File URL: http://siteresources.worldbank.org/EXTPREMNET/Resources/EP134.pdf
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    Citations

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    Cited by:

    1. Pierre-Richard Agénor & Karim El Aynaoui, 2015. "MAROC : Stratégie de croissance à l’horizon 2025 dans un environnement international en mutation," Books & Reports, Policy Center for the New South, number 1, December.
    2. Abdelkrim Araar & Nada Choueiri & Paolo Verme, 2017. "The Quest for Subsidy Reforms in Libya," Natural Resource Management and Policy, in: Paolo Verme & Abdlekrim Araar (ed.), The Quest for Subsidy Reforms in the Middle East and North Africa Region, chapter 0, pages 119-156, Springer.
    3. Laura El-Katiri, 2016. "Morocco’s Green Energy Opportunity," Policy notes & Policy briefs 1637, Policy Center for the New South.
    4. Georgeta Vidican Auktor & Markus Loewe, 2022. "Subsidy Reform and the Transformation of Social Contracts: The Cases of Egypt, Iran and Morocco," Social Sciences, MDPI, vol. 11(2), pages 1-22, February.
    5. Bentour, El Mostafa, 2015. "On the removal of energy products subsidies in an importing oil country: impacts on prices in Morocco," MPRA Paper 63635, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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