Morocco Likely to Seek International Aid for Earthquake Recovery, Fitch Reports

The reconstruction efforts following the devastating earthquake of September 8 will lead to an increase in public spending and the budget deficit in the short term, the agency said in a report, explaining that international aid could support part of the reconstruction costs and that "financial transfers will provide more support for external liquidity".

Morocco has announced the implementation of a reconstruction plan for the cities affected by the earthquake, including Rabat, Casablanca, Meknes, Fez, Marrakech (north), Agadir and Taroudant (center). An amount of around $11.7 billion (8.5% of GDP) will be mobilized to carry out these works over a period of five years, reports Anadolu Agency.

According to Fitch, "the costs of the recovery will likely further increase spending, leading to higher deficits and debt. However, it is not clear what share the government will bear of the reconstruction plan costs. So far, $700 million has been collected. External grants are still unclear at this stage."

The rating agency estimates that external aid should allow Morocco to "offset the reconstruction costs and higher borrowing needs." The Al Haouz earthquake has already killed 2,960 people and injured 6,125, as well as causing significant material damage, according to the latest data from the Moroccan Ministry of the Interior. Some 2.8 million people have been affected by this earthquake, according to the High Commission for Planning (HCP).