Fitch Gives Morocco BBB- Rating with Stable Outlook

Fitch Ratings gave Morocco ‘BBB-‘ rating with a stable outlook due to the country’s macroeconomic stability, comfortable external buffers and a low share of foreign-currency debt in public debt.

The Moroccan government has prioritized social policies in the 2019 budget, said Fitch in a press release, noting that the country is planning an overhaul of social programs as well as measures to support consumer purchasing power, spur employment and reduce regional disparities.

Fitch projects a broadly stable deficit of 3.7 pc of GDP in 2019 before narrowing slightly to 3.5 pc of GDP in 2020. GDP growth will average 3.2 pc in 2018-2020, in line with the current ‘BBB’ category median of 3.3 pc.

Following a bumper harvest in 2017, crop production has further increased during the current season due to supportive weather conditions and improved productivity.

As to activity in the non-agricultural sector, it is underpinned by continued foreign-financed investments in the automotive and aeronautic industries, steady growth in mining production and strong tourism, said Fitch.

According to Fitch forecast, foreign direct investments will average 1.7% of GDP in 2018-2020. Morocco’s two-year precautionary liquidity line (PLL) with the IMF expired in July and the government has applied for a successor arrangement with the Fund. A new precautionary arrangement would offer a safety net against risks of external stress.