Assessing the sustainability of fiscal policy in Morocco: Insights into economic stability

Authors

  • Abdellah Abaida Laboratory of Management, Innovation and Applied Research, Department of Economics, Faculté d’Economie et de Gestion, Ibn Zohr University, Guelmim, Morocco. https://orcid.org/0000-0001-9814-8318
  • Youssef Lakrari Laboratory of Research on Theoretical and Applied Economics, Department of Economics, Faculté d’Economie et De Gestion, Hassan 1st University, Settat, Morocco. https://orcid.org/0000-0001-6254-1652
  • Ahmed Lemgadar Laboratory of Research on Theoretical and Applied Economics, Department of Economics, Faculté d’Economie et De Gestion, Hassan 1st University, Settat, Morocco. https://orcid.org/0000-0003-2278-8073
  • Jamal Agouram Laboratory of Management, Innovation and Applied Research, Department of Economics, Faculté d’Economie et de Gestion, Ibn Zohr University, Guelmim, Morocco. https://orcid.org/0000-0002-1574-1464

DOI:

https://doi.org/10.33094/ijssp.v12i1.876

Keywords:

Economic growth, Fiscal policy, Macroeconomic indicators, Morocco, Sustainability.

Abstract

This study explores the sustainability of fiscal policy in Morocco, a country with limited natural resources, by examining the factors that contribute to its long-term effectiveness. To assess fiscal policy sustainability, we used a quantitative approach, drawing on historical data and relevant macroeconomic indicators. Our analysis focused on the relationship between fiscal policy and economic growth, which is a crucial factor affecting public finance sustainability, among other key macroeconomic indicators. We utilized a combination of two models, cointegration strategy and Bohn's adapted specification method, to investigate the long-run properties of the intertemporal budget constraint. Our findings suggest that fiscal policy in Morocco may not be sustainable and effective in the long-term, indicating potential risks and threats to the country's economic stability. Unsustainable fiscal policies can lead to a lack of confidence in public finance, currency depreciation, and inflationary pressures. Therefore, it is essential to take action to address the sustainability of Morocco's fiscal policy to counteract potential crisis shocks on the economy. The research suggests policymakers the need to implement effective fiscal policy that can address the challenges facing Morocco's economy. The fiscal rules will confronting the economic structural problems; however, it will promoting fiscal transparency and long-term economic growth.

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Published

2023-03-20

How to Cite

Abaida, A. ., Lakrari, Y. ., Lemgadar, A. ., & Agouram, J. (2023). Assessing the sustainability of fiscal policy in Morocco: Insights into economic stability . International Journal of Social Sciences Perspectives, 12(1), 60–72. https://doi.org/10.33094/ijssp.v12i1.876

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Articles