Compensation Fund's subsidies in Morocco estimated at around $2 billion in 2009

    The Compensation Fund is a subsidy meant to stabilise the price of staple supplies.

    Out of this total, which represents subsidies for oil products, the butane gas and sugar, 4.8 billion dirhams represent arreas carried forward to 2009, the ministry said in a statement, issued following a meeting of the Fund’s board of directors on Friday.

    The board noted "with satisfaction" the absence of any arrears carried over to 2010.

    The 2010 budget has allocated 14 billion dirhams to the Fund to preserve the purchasing power of citizens, the Finance Minister had said in October.

    He also announced that the government intends to reform the   compensation system to better target the needy social groups.      

    The measures related to the tax reform and wage increase for 2009 and 2010 are to cost an amount of 16 billion dirhams ($ 2.1 billion), with tax cuts worth some 9.6 billion dirhams ($1.2 bln).

    The Budget, which forecasts a 3.5% growth, a not-more-than 2% inflation, and an oil barrel priced at 75 U.S. Dollars, provides for creating 23,800 job opportunities.

    It expects the budget deficit to attain 4% and hopes the stability of expenditure will be similar to that of 2009. The Budget also expects a 20.4% rise in public investment, which would jump 40% over the period 2009-2010.