Rabat - Fitch Ratings confirmed Morocco’s credit rating at BBB- earlier this week, citing economic performance and public finance improvements as the reasons for the decision.
Rabat – Fitch Ratings confirmed Morocco’s credit rating at BBB- earlier this week, citing economic performance and public finance improvements as the reasons for the decision.
The credit rating agency said it expected the kingdom’s economy to grow by 2.6 percent in 2018 – compared to 2.2 percent in 2015 – as the sale of phosphates picks up speed and the manufacturing sector grows.
Foreign direct investments (FDI) into the country will remain stable at 2.5 percent of GDP over the next several years, the report said, adding that analysts expect the budget deficit to decrease from 4.3 percent of GDP in 2015 to 3.5 percent in 2016.
Fitch also said Morocco’s GDP growth has been higher than ‘BBB’ medians countries over the past five years, despite 2016’s failed agricultural season caused by virtually absent rainfall.
The peaceful proceedings of this month’s legislative elections gave credence to the ruling Justice and Development Party’s ability to continue existing monetary policies and push for the reforms the government has previously committed to, the agency said.
Still, any successful terrorist attack – especially in tourist areas – could severely affect GDP growth.
“We expect economic policies to remain stable and predictable, focussing on maintaining macro-stability and consolidating public finances,” the report said. “Morocco is exposed to terrorist risk though; any terrorist attack could affect macroeconomic performance through the tourism channel.”
Earlier this month, Standard and Poor’s also confirmed its BBB-/A-3 rating for Morocco due to forecasted budget deficit reductions.
In April, weak agricultural output led S&P to halve its expectations for the kingdom’s 2016 economic growth from 4.5 percent to less than two percent.
