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Rabat – Morocco has regained investment-grade status from the American ratings agency Standard & Poor’s (S&P), which upgraded the kingdom’s sovereign rating to BBB-/A-3 on Thursday.
The move restores a label Morocco lost in 2021 during the pandemic downturn, making it the only African sovereign borrower currently rated investment-grade by S&P.
The climb back was gradual. Morocco had long hovered at the edge of investment grade, rated BBB- until 2021, when S&P cut it to BB+. In March 2024, the outlook shifted from stable to positive, a precursor to this week’s upgrade.
The decision follows a mission conducted in Morocco in September and reflects the country’s resilience amid successive economic shocks, including the COVID-19 pandemic, global supply-chain disruptions, and recent U.S. trade tariffs. S&P highlighted the kingdom’s structural reforms and macroeconomic policies, which have contributed to stabilizing public finances and diversifying the economy.
The upgrade places Morocco among governments deemed safe bets by international bond markets, alongside peers such as Hungary and Oman, while much of the African continent remains below investment-grade. It breaks from a global trend of downgrades: Moody’s in May cut the United States one notch, while other advanced economies such as France and Italy face rising scrutiny over fiscal slippage.
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For Morocco, the change to investment-grade status means lower yields on external borrowing and renewed investor confidence, potentially attracting more foreign direct investment, particularly as the government seeks to finance infrastructure, energy transition projects, and industrial policy initiatives.
S&P forecasts Morocco’s real GDP growth averaging 4% between 2025 and 2028, with a budget deficit narrowing to 3% of GDP by 2026 and a current-account shortfall contained at around 2% of GDP over the same period. The agency also emphasized the positive impact of the kingdom’s ongoing socio-economic and fiscal reforms in promoting formalization and economic diversification.
Despite the upgrade, risks remain. Agricultural volatility linked to climate change, persistent inequality, and debt sustainability will determine whether Morocco can maintain its regained investment-grade status.
This is the second upgrade by S&P in recent months, following the March 2024 revision that changed Morocco’s economic outlook from “stable” to “positive.” The successive upgrades come amid a challenging global context, where many countries—including developed economies—have seen their sovereign ratings downgraded.
