Moody’s Upgrades Morocco’s Economic Outlook, Cites Post-Pandemic Recovery

This progress reflects the general trend of improvement, which is reflected in "the recovery of real GDP to pre-pandemic levels and the Moroccan government’s demonstrated crisis management capacity during the pandemic," Moody’s recent note indicates.

According to the agency, an improvement in governance performance would allow the government to gradually consolidate the budget and debt ratios and budget balances, while "maintaining social stability in the face of the kingdom’s exposure to the price shock triggered by the war in Ukraine."

As for the maintenance of the Ba1 rating, it is explained by Morocco’s economic resilience and the accumulation of significant foreign exchange reserves covering more than six months of imports at the end of 2021, Moody’s said, adding that the credit profile is limited by higher general government debt levels than the median of Ba-rated sovereigns.

Furthermore, the local currency ceiling remains at Baa1, three notches above the sovereign rating, reflecting predictable institutions and low external vulnerability risk, balanced by a large public sector footprint, the agency specified.