An American agency upgrades Morocco's rating outlook from “stable” to “positive”

The American rating agency “Standard & Poor's” maintained Morocco's sovereign credit rating at BB+/B, while raising the outlook associated with this rating from “stable” to “positive”, in particular due to “the improvement of socio-economic and financial reforms”.

In a press release published Friday, the rating agency affirmed that “this positive outlook reflects our expectations that Morocco will capitalize on its recent achievements in the implementation of socio-economic and financial reforms, thus paving the way for growth. stronger and more inclusive and to a reduction in the budget deficit.
Standard & Poor's Global stressed that the Moroccan economy has demonstrated “resilience” in the face of multiple shocks over the past five years and has maintained its capacity to mobilize local and foreign financing, adding that “the continued implementation Implementing socio-economic and financial reforms will help strengthen the formalization of the economy and make it more inclusive and competitive, thereby boosting GDP growth and reducing the budget deficit, even if gradually.

The US agency said that “the budget deficit and current account deficit declined more than expected in 2023, to 4.4% and 0.6% of GDP, respectively, and we expect the financial situation to continue to strengthen “.

The statement added: “We believe that the current, albeit gradual, change in Morocco's basic economic structure will be beneficial to the prospects for growth, economic stability and financial trajectory.”

The rating agency forecasts that Morocco's GDP growth will reach 3.4% in 2024, compared to 3.1% in 2023, supported by strong performances in the tourism, automobile and aviation sectors, before increasing to 3.7% in the period 2025-2027.

Standard & Poor's Global also reported that economic growth will be supported by stronger domestic demand, supported by lower inflation and increased private investment, which will benefit from ongoing economic reforms and higher growth. strong in the euro zone, Morocco's main trading partner.

The rating agency estimates that the Moroccan economy will gradually benefit from the development of large-scale projects, in particular the organization of the 2025 African Cup of Nations and the 2030 Football World Cup, as well as the implementation implementing social and economic reforms and expanding export capacity.

The rating agency also expects the budget deficit to GDP to narrow to 3% by 2027.

Standard & Poor's Global noted that the Moroccan economy has faced numerous global, regional and local headwinds in recent years, including rising energy and food prices, the repercussions of the COVID-19 pandemic, Covid-19, as well as numerous periods of drought.

She said the number of tourists arriving in 2023 was 12.3% higher than pre-pandemic levels in 2019, which is “a better performance than the global average”, despite the earthquake that hit the region. Marrakech in September last year.

Standard & Poor's noted that the average current account deficit declined to 0.6% of GDP in 2023, from our previous estimate of 2.7%, partly reflecting the economy's continued diversification, noting many measures taken by Morocco, notably the creation of a unified register to improve the targeting of households eligible for social assistance programs and the reform of the investment pact.

The agency said the implementation of structural reforms and social support programs will limit the sharp decline in the budget deficit in the short term, but will support public finance control in the medium and long term.

The rating agency forecasts a gradual increase in foreign direct investment flows over the coming years, alongside structural economic reforms which strengthen Morocco's attractiveness for investors, recalling in this regard the confidence placed in the Kingdom by the community international financial market, recently illustrated by the success of the issuance of international bonds carried out by Morocco on the international financial market in March 2023

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