Morocco's economy grew by 4.2 per cent in the second quarter of 2011, a slower rate of expansion than the 5 per cent seen in the first quarter, the central bank said on Tuesday.

The country's budget deficit rose 17 per cent to 22.7 billion dirhams in the eight months to end-August, as the government raised public sector wages and boosted food and energy subsidies to prevent a spillover from revolts that have shaken countries in the region since January.

Morocco's economy depends largely on agriculture and tourism.