We are affirming our investment-grade long- and short-term foreign and local currency sovereign credit ratings on Morocco at 'BBB-/A-3' and 'BBB/A-2', respectively. We expect economic reforms, and particularly petroleum subsidy cuts, to diminish Morocco's external and fiscal deficits. We are revising the outlook to negative from stable. This reflects our view that the Moroccan authorities are finding it more challenging to reduce the vulnerabilities created by the twin deficits in the context of a difficult external environment, while maintaining Morocco's traditional political and social stability. The negative outlook reflects our view that we could lower the ratings if the fiscal and current account deficits do not narrow significantly, if social pressures escalate and impair reform progress, or if economic performance
