RABAT: Morocco expects spending on subsidies of soft wheat, cooking gas and sugar to rise to 32 billion dirhams ($3.2) from 21 billion dirhams last year, due to a surge in international prices, the prime minister told parliament on Monday.

The government earmarked 17 billion dirhams for subsidies in the budget, and the shortfall will be offset by higher tax revenue, Prime Minister Aziz Akhannouch said. “So far we did not resort to additional loans or use a liquidity line,” he said, adding that tax revenue had risen by a quarter by the end of February compared to the same period last year.

Last month the central bank said Morocco’s fiscal deficit would remain unchanged at 6.3%, citing an increase in phosphates sales. The government expects growth to be 1.7% this year from 7.3% last year after the worst drought in decades led to a drop in agricultural output. The agriculture ministry said 53% of wheat plantations have been lost to drought this season.

Morocco ended diesel and gasoline subsidies in 2015, but it has offered aid to transport operators such as trucks and taxi drivers to mitigate the impact of higher prices.

It also provided 2 billion dirhams for the pandemic-hit tourism sector and 10 billion dirhams to help farmers deal with the impact of drought.