2023-04-30 09:43:44
In a note, Fitch stresses that Morocco’s rating reflects a track record of sound macroeconomic policies and an institutional framework that has supported resilience to shocks, as well as a favorable debt composition, including a moderate share of foreign currency debt. in central government debt. Support from public creditors and a comfortable external liquidity cushion are also highlighted by the agency.
However, it notes that these ratings are limited by weak development and governance indicators, high public debt and a larger budget deficit than peer countries, as well as the volatility of agricultural production.
Noting that economic growth slowed in 2022 to 1.2% from 7.9% in 2021, as agricultural production contracted by 15% due to a severe drought, the agency forecasts a recovery in the growth of the GDP at 3%, in 2023 supported by better agricultural production.
In 2024, Fitch Ratings expects growth of 3.2%, driven by industrial sectors. The factors likely to slow down growth are inflation, a tightening of monetary policy, a slowdown in the main trading partners or difficult weather conditions. The agency maintains, however, that the implementation of key structural reforms will support investment and economic growth.
The agency also expects inflation to fall to 5% in 2023, due to rising interest rates, falling global commodity prices and easing supply shortages.
In 2024, inflation will fall to 3.7%, although it will be above the medium-term average, the US rating agency said.
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