S&P revises Morocco’s outlook to positive

Credit rating agency Standard & Poor’s revised Morocco’s outlook to positive BB+/B thanks to social, economic, and budgetary reforms.

With the new rating, Morocco edges closer to retrieve its investment grade, lost during the Covid-19 pandemic.

“Morocco’s economy has proven resilient in the face of multiple shocks over the past five years, and maintained access to domestic and external financing,” S&P said.

The agency believes that continued implementation of socioeconomic and budgetary reforms will help formalize the economy further and make it more inclusive and competitive, thereby stimulating GDP growth and bringing down budget deficits, albeit gradually.

It expects Morocco’s fiscal consolidation to continue in 2024, after a narrower than expected fiscal and current account deficits in 2023 at 4.4% and 0.6% respectively.

“We could raise our ratings on Morocco within the next 12-18 months if the government continues to implement structural reforms, resulting in stronger economic growth and a broadening of the tax base, while budget deficits continue to decline,” S&P said.

The agency expects Morocco’s annual economic growth to accelerate and average 3.6% in 2024-2027, while the budget deficit will decline to 3% of GDP by 2027.

It mentioned the beneficial impact on the economy of the African Cup of Nations in 2025 and the 2030 World Cup to be hosted in Morocco.

“GDP per capita will remain below that of several of Morocco’s peers but will increase gradually to almost $5,000 in 2027 from around $4,000 in 2023,” it said.