Morocco

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Ongoing economic reforms should engender more inclusive growth, although per capita income levels remain relatively low. Net general government debt will remain around 65% of GDP, despite a gradual reduction in budget deficits. --In our view, the earthquake that hit the Marrakech region in early September will not materially weigh on economic growth. --Morocco has remained resilient in the face of several shocks over past decades, maintaining access to domestic and external financing. --Extending social protection, combined with increasing digitalization, should enable the authorities to formalize more of the economy, and eventually widen the tax base. --The government?s economic and fiscal structural reforms

...In our view, the earthquake in the Marrakech region will not materially weigh on economic growth. We have revised our real GDP growth forecast for 2023 downward slightly to 3.1%, from our projection of 3.4% in our review published in March 2023, mainly on the back of a weaker than expected agricultural season. The September 2023 earthquake, which killed almost 3,000 people, occurred far from the largest cities and industrial areas, including the phosphate mines, and from the automotive and aeronautical industries in the northwest. The earthquake risks deterring some tourists from visiting Morocco, especially the Marrakesh region. However, we expect the tourism sector across the whole country to perform well overall in 2023; tourist numbers already surged by 92.5% in first-half 2023, compared with the same period in 2022. The government created a special account dedicated to expenses relating to the earthquake, which should mitigate the direct pressure on the budget deficit. National, international,...

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