Fitch Ratings confirmed Morocco’s credit rating at “BB+” with a stable outlook in its report published on October 8, 2024. This decision is based on the country’s solid macroeconomic fundamentals, constant support from its official creditors, as well as reserves liquidity considered comfortable. However, Fitch warns of certain challenges, such as development indicators below those of its peers, high public debt and increased vulnerability to adverse climatic conditions.
In 2023, the Moroccan economy grew by 3.4%, but Fitch forecasts a slight slowdown to 3.0% in 2024. This decline would be mainly due to a reduction in agricultural production, linked to a deficit in precipitation. . However, Fitch expects a gradual recovery in economic growth with an average of 3.5% over the period 2025-2026. This recovery would be supported by a stabilization of agriculture and strong performance in non-agricultural sectors, such as tourism and the automobile industry.
Fitch projects a budget deficit of 4.1% of GDP in 2024, a slight improvement compared to the 4.3% recorded in 2023. In the medium term, the agency forecasts a gradual reduction in the deficit, which should reach an average of 3 .6% over 2025-2026. This reduction would be driven by budgetary consolidation efforts and a gradual reduction in subsidies. However, social spending, particularly in terms of social protection, is expected to continue to put pressure on public finances.
As for public debt, Fitch estimates that it will reach 70% of GDP in 2024, a level which should remain stable in the years to come. Although this ratio is higher than the average for other “BB” rated countries, Fitch considers that the refinancing risk remains limited. This is explained by a debt structure that is mainly fixed rate and denominated in dirhams, thus reducing Morocco’s exposure to foreign currency fluctuations.
Morocco’s foreign exchange reserves, valued at $37.3 billion in August 2024, remain an important pillar for economic stability. These reserves also benefit from a flexible credit line of $5 billion granted by the International Monetary Fund (IMF), thus providing an additional safety net in the face of possible economic shocks.
Fitch notes that, despite relative political stability, Morocco faces challenges in governance and social tensions, particularly due to the high unemployment rate among urban youth. This context could constitute a risk in the medium term, particularly if these tensions are not mitigated by effective public policies.
LNT
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