Marrakech – Fitch Ratings has affirmed Morocco’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘BB+’ with a Stable Outlook, citing the country’s sound macroeconomic policies and strong official creditor support.
The rating affirmation, announced Monday, points to Morocco’s “favourable debt profile and comfortable international liquidity buffers,” according to Fitch’s statement from its Hong Kong office.
These strengths are balanced against “lower development and governance indicators compared with peers, high government debt and the economy’s exposure to adverse weather conditions,” Fitch noted.
The rating agency forecasts the central government fiscal deficit will stabilize at 3.8% of GDP in 2025 and average 3.1% over 2026-2027, unchanged from 2024 levels.
Tax revenue is expected to hold steady at 18.7% of GDP, boosted by “recent tax reforms that have streamlined the tax system and supported stronger compliance,” despite the impact of the 2025 personal income tax reform that lowers effective rates.
Fitch projects government expenditure will decline to 25.8% of GDP over 2025-2027, down from 27.1% in 2024, as “lower capex more than offsets higher current spending.”
Current spending is forecast to increase to 20.2% of GDP during the forecast period, compared to 19.4% in 2024, driven by “higher social spending, including education and health systems.”
The agency expects central government debt to gradually decline to 67.0% in 2025 and 65.3% in 2027, down from 68.0% in 2024 but still “significantly above the ‘BB’ median” of 52.1% projected for 2027.
Despite the high debt ratio, Fitch considers refinancing and exchange-rate risks “contained” as 88% of total debt consists of medium and long-term instruments, 89% carries fixed interest rates, and 75% is denominated in local currency.
The rating agency identified fiscal risks from Morocco’s infrastructure spending program ahead of the 2030 World Cup, which it estimates will cost about 18% of GDP based on public disclosures.
“We assume this spending will not burden the central government budget as we expect most projects to be financed through public-private partnerships,” Fitch stated, while acknowledging “meaningful risks to public finances.”
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Morocco’s real GDP growth remained stable at 3.8% in 2024, as “a significant contraction in agricultural output offset an improvement in non-agricultural growth.”
The agency forecasts growth acceleration to 4.4% in 2025, averaging 3.9% over 2026-2027, aided by “increased rainfall in early 2025” that should “temporarily alleviate the drought effects and boost agricultural output.”
On external finances, Fitch projects the current account deficit will increase slightly to 1.4% of GDP in 2025 and average 2.4% over 2026-2027, up from 1.2% in 2024, reflecting “a deteriorating trade deficit and stabilising services surplus.”
The country’s foreign reserves stood at $45 billion as of August 2025, up from $37 billion in August 2024, providing a buffer of 5.3 months of current external payments over 2025-2027, “higher than the average ‘BB’ median of 4.8 months.”
Last week, S&P Global Ratings upgraded Morocco to investment grade, making it “Africa’s sole investment-grade Eurobond issuer.” The upgrade to BBB- with a stable outlook places Morocco on par with Hungary and Oman.
“Morocco’s recent economic performance and its outlook are supported by its policy mix and strong structural socioeconomic and budgetary reform momentum,” S&P wrote, noting the importance of the upgrade as Morocco prepares for co-hosting the 2030 World Cup with Spain and Portugal.
