Standard and Poor's agency raises Morocco's rating outlook from “stable” to “positive”


The American rating agency Standard & Poor's (S&P) maintained Morocco's sovereign debt rating BB+/B, raising the outlook associated with this rating from “stable” to “positive”, thanks in particular to “the improvement of socio-economic reforms”. economic and budgetary.

“This positive outlook reflects our expectations that Morocco will build on its recent achievements in implementing socio-economic and budgetary reforms, paving the way for stronger and more inclusive growth and a reduction in budget deficits,” underlined the rating agency in a press release published Friday.

The Moroccan economy has demonstrated “resilience” in the face of multiple shocks over the past five years and has maintained its access to domestic and external financing, noted S&P Global, adding that “the continued implementation of socio-economic reforms Economic and fiscal policies will help to further formalize the economy and make it more inclusive and competitive, thereby boosting GDP growth and reducing budget deficits, albeit gradually. »

“Budget and current account deficits fell more than expected in 2023, to 4.4% and 0.6% of GDP, respectively, and we expect fiscal consolidation to continue,” the US agency said.

S&P Global indicated that it could raise Morocco's rating in the next 12 to 18 months “if the government continues to implement structural reforms, favoring stronger economic growth and a broadening of the tax base, while budget deficits continue to decline.”

“We believe that the ongoing, albeit gradual, change in Morocco's underlying economic structure will benefit growth prospects, economic stability and fiscal trajectory,” according to the statement.

The rating agency forecasts that Morocco's GDP growth will reach 3.4% in 2024, compared to 3.1% in 2023, supported by robust performance in the tourism, automobile and aerospace sectors. , before climbing to 3.7% in 2025-2027.

Economic growth will be supported by stronger domestic demand, helped by falling inflation and increased private investment, which will benefit from ongoing economic reforms and stronger growth in the euro zone, Morocco's main trading partner, said added S&P Global.

The Kingdom's economy will also gradually benefit from the development of large-scale projects taking into account the organization of the African Cup of Nations in 2025 and the Football World Cup in 2030, the implementation of socio-economic reforms. -economic and the expansion of Morocco's export capacity, affirmed the same source.

The rating agency also forecasts that the budget deficit will decrease to 3% of GDP by 2027.

The Moroccan economy has faced several global, regional and local headwinds in recent years, noted S&P Global, citing soaring energy and food prices, the consequences of the COVID-19 pandemic as well as than multiple episodes of drought.

In 2023, the number of tourist arrivals was 12.3% higher than the 2019 level before the pandemic, noted the rating agency, noting that this is a “better than average” performance. world”, despite the earthquake that struck the Marrakech region in September last year.

“The current account deficit narrowed to 0.6% of GDP in 2023, from our previous estimate of 2.7%, partly reflecting the economy's continued diversification,” noted S&P Global, which cites several measures taken by Morocco, including the establishment of a unified register to better target households eligible for social assistance programs and the reform of the investment charter.

“The implementation of structural reforms and social support programs will limit the sharp decline in budget deficits in the short term, but will support fiscal consolidation in the medium and long term,” the agency said.

In terms of outlook, the agency expects FDI flows to gradually increase in the coming years, as the implementation of structural economic reforms makes Morocco more attractive to investors while recalling, in this context, the confidence of the international financial community enjoyed by the Kingdom which was recently reflected in the success of the bond issue carried out in March 2023.

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