Fitch maintains Morocco’s investment rating – Jeune Afrique

 The rating agency highlights the solidity of public finance indicators of the realm.

Fitch Ratings affirmed Morocco’s rating to ” BBB- “for its long-term emissions foreign currency and” BBB “for its long-maturity issues in local currency, with a stable outlook.

This note up Morocco’s sovereign bonds in the category of the so-called “investment”, considered safest by investors.

In his study published October 23, the rating agency highlights the macroeconomic stability of the kingdom and states that ” gradual consolidation of the public deficit and the foreign trade deficit will sustain the momentum for reducing public and external debt. “

The agency expects a growth rate of 4.6% in 2015 ( against 2.4% in 2014) – 0.3 point higher than the forecast by Fitch in April – mainly because of sustained agricultural production

Public Finance.

Fitch Ratings also points if the level of public debt, estimated at 49.1% of GDP at end 2014 is higher than that of countries sharing the same rating as Morocco, its composition is ” favorable “, with a moderate share of loans in foreign currency (31.4% at end-2014), a” reasonable “maturity and low costs.

The agency expects” its reduction “this debt after” peak “of last year, in line with the deficit reduction policy. The objective of a deficit of -4.3% of GDP announced by Rabat this year is “credible in the light of budget execution figures at the end of July 2015″. Ditto for the medium-term objective set at 3% of GDP in 2017.

In its report, Fitch Ratings puts particular emphasis on the net absorption of current account deficit since 2012. It is expected by Fitch at 3.1% of GDP this year, against -9.5% in 2012, a result of the decline in oil import bill, but also the “development of new manufactured goods (car exports increased 15% year on year in the period January-August 2015 according to the agency) and an ongoing economic recovery in the EU area, Morocco’s main trading partner. “

Outlook

The continued reduction of deficits and public debt are factors that, according to Fitch Ratings, could lead to revised upwards the rating of Morocco.

However, a degradation of public and external accounts, as well as a decline in growth prospects in the medium term or political and social tensions complicating the pursuit of reforms could result in a decline in the rating of the kingdom.