* Gov't almost doubles 2011 subsidies
* Move to cope with rise in global commodity prices - Gov't
* Subsidies weigh heavily on Morocco's public finances
(Adds government spokesman paras 4-5)
By Souhail Karam
RABAT, Feb 15 The Moroccan government on Tuesday
said it has decided to almost double funds allocated to state
subsidies to counter an increase in global commodity prices amid
revolts in some Arab countries.
The government will add 15 billion dirhams ($1.8 billion) to
the 17 billion dirhams allocated by the 2011 budget for the
government's subsidy fund called Caisse de Compensation, the
official MAP news agency said.
The Finance Ministry declined to immediately say how the
government intends to fund this increase in expenditure.
Government spokesman Khalid Naciri said it was too early to
disclose how the government intended to finance the extra cost
of the move.
"We're addressing the social needs. We are listening to
those among our population who are suffering poverty ... We want
to support the housemaker's shopping basket and deal with the
global surge in oil and cereal prices," Naciri told reporters.
Morocco's budget deficit by the end of November 2010 hit the
4 percent target fixed by the government for the whole of last
year after state subsidies rose 126 percent to 25.9 billion
The Moroccan government had fixed a 4 percent of GDP deficit
target for 2010 and 3.5 percent for 2011. Economic growth had
been projected to reach 4 percent in 2010 and 5 percent in 2011.
Based on Reuters calculations, this means that at 32 billion
dirhams the Caisse de Compensation alone would cost 4 percent of
the country's GDP in 2011, if the 5 percent growth target is
Earlier this month, the Planning Authority (HCP) said the
country's Gross Domestic Product (GDP) looked set to post growth
of 3.3 percent. The finance ministry puts the country's 2009 GDP
at 732.3 billion dirhams.
Morocco heavily subsidises staples, such as cooking gas,
sugar and flour. Last month, the government promised to keep
staples affordable at any price even if a surge in global prices
of food and oil have a severe impact on its public finances this
The statement followed a wave of street protests that rocked
Algeria, Egypt and Yemen and which was inspired by the toppling
of Tunisia's president after a popular revolt the same month.
Morocco's 2011 budget was based on an oil price of $75,
while Brent crude oil rose on Tuesday to near $104. Official
data also showed the country's soft wheat stocks fell to cover a
little over 60 days of needs, their lowest in several months,
which may pressure the government to resume international
imports at large scale.
Analysts say Morocco's subsidies system could be enhanced by
making sure it benefits those who need it most.
Morocco, a country of 32.6 million, has no oil or gas of its
own and is among the world's top 10 wheat importers. Prices of
bread and gas would at least double if the state was to abandon
the subsidies system completely.
Dozens of Moroccans were shot dead by security in 1981 after
a popular revolt to protest an increase in bread prices, the
bloodiest street revolt in the country's modern history.
(Editing by Ron Askew)