Although Morocco is among the countries of which their economies experienced setbacks from COVID-19, the country is determined to exit the war against the pandemic with least impact.
Rabat – The year 2020 is definitely not the best for economies worldwide due to COVID-19, and many countries are receiving loans to mitigate the crisis resulting from the pandemic.
The Economist conducted a study on 66 emerging economies, featuring Morocco as the 26th most financially strong.
Like most countries,Morocco has been attempting to survive the pandemic crisis. Morocco is more financially stable than many emerging markets despite the impact of the coronavirus.
The Economist used four sources of peril as indicators to assess the emerging states. In addition to being 26th among all assessed states, Morocco ranked fourth in the Arab world.
The indicators of financial strength look at public foreign debt, foreign debt, cost of borrowing, and reserve cover.
In a chart,the Economist chart illustrated financial vulnerability with colors ranging from yellow, light orange, and red, to dark red to show how a country is doing in the four indicators.
The chart also used shades of blue to show how financially strong countries are.
Compared to other Arab and African countries, Morocco had only one section in orange: Public debt. In the other three sections, Morocco earned blue labels.
Countryeconomy.com estimated Morocco’s national debt at nearly $77 billion.
The total debt in 2018 reached 64.96% of Morocco’s GDP, representing a 0.15% increase from 2017 (65.11%).
The North African country, however, is doing relatively better in foreign debt, cost of borrowing, and reserve cover.
Ceic Data estimated the country’s external debt at $54.3 billion in December 2019 compared to $53 billion in the previous quarter.
The Economist ranking chart shows Morocco doing better than several richer countries in terms of the indicators, including Qatar and South Africa.
The Economist explained that half of the countries in the chart have enough reserves to cover all of their foreign-debt payments due this year and any current-account deficits.
“The rest (including 27 of the bottom 30) have a combined reserve shortfall of about $500bn.”
As one of the more financially secure countries, Morocco is able to cover its debt requirements with its foreign reserve.
Bank Al Maghrib said in February 2019 that Morocco’s net international reserves were MAD 245.5 billion ($25.3 billion) from January 2 to 8. At the end of January, however, they declined to MAD 243.9 billion ($25.1 billion) and have now dropped even further.
Despite the positive overview, the Economist explained COVID-19 “hurts emerging economies.”
The pandemic hurts emerging countries in three ways, including lockdowns, damage of export earnings, and deterring foreign capital, the news outlet’s study finds.
“Even if the pandemic fades in the second half of the year, GDP in developing countries, measured at purchasing-power parity, will be 6.6% smaller in 2020 than the IMF had forecast in October,” the study predicts.
Morocco imposed a nationwide lockdown on March 20 to contain the spread of the pandemic.
The lockdown has deprived thousands of people of work due to COVID-19 suspensions. The country, however, is surviving the crisis thanks to the Special Fund for the Management and Response to COVID-19 that King Mohammed VI ordered created in mid-March.
The fund helps Morocco to buy equipment needed at hospitals and to assist temporarily unemployed Moroccan workers with monthly stipends.