Morocco’s Compensation Fund is facing increasing budgetary pressure. At the end of July 2026, compensation-related charges reached MAD 12.9 billion, representing 93.4% of the MAD 13.8 billion budget allocation initially planned under the 2026 Finance Law.

This means that more than 93% of the annual budget had already been reached after only seven months of the year.

Transport sector support

The increase in compensation costs is mainly linked to direct support provided to transport professionals in response to higher fuel prices.

These measures amounted to approximately MAD 1.3 billion by the end of July 2026. The international energy situation, particularly geopolitical tensions and disruptions affecting energy markets, has increased pressure on fuel prices.

A narrow budgetary margin

The pace of spending raises questions about the remaining budgetary margin for the final months of 2026.

For comparison, total compensation charges amounted to approximately MAD 19.2 billion in 2025. The difference between last year’s actual spending and the MAD 13.8 billion budgeted for 2026 was already around MAD 5.4 billion.

The current trajectory therefore creates a potential risk of additional pressure on public finances if energy prices remain elevated.

Energy remains a key factor

Morocco’s compensation mechanism currently covers two major areas: butane gas and support for transport operators to offset higher hydrocarbon prices.

The evolution of international energy prices will therefore remain decisive for the final cost of the compensation system in 2026.

A challenge for the government

The government faces a difficult balancing act: protecting purchasing power and economic activity while controlling the growth of public expenditure.

The current situation also highlights the importance of gradually improving the targeting of support mechanisms and strengthening the resilience of public finances against external energy shocks.

With 93.4% of the annual allocation already consumed at the end of July, the Compensation Fund will remain one of the key indicators to watch during the final months of 2026.