Research Update: Morocco 'BBB-/A-3' Ratings Affirmed; Outlook Stable

Because of the government's measures to counter the economic effects of COVID-19 and the adverse cyclical impact, we expect Morocco's budget deficit to widen to 5.2% of GDP in 2020, with net government debt reaching 55.4% of GDP before gradual budgetary consolidation resumes with the 2021 economic rebound. Positively, in March 2020, authorities widened the fluctuation band for the dirham from plus or minus 2.5% to plus or minus 5%, a further step on the gradual path of currency regime liberalization. We believe the precautionary and liquidity line approved by the IMF and in place until December 2020 underpins the country's macrofinancial stability in the near term and its economic and budgetary policy objectives over the forecast horizon. As a

...- Because of the government's measures to counter the economic effects of COVID-19 and the adverse cyclical impact, we expect Morocco's budget deficit to widen to 5.2% of GDP in 2020, with net government debt reaching 55.4% of GDP before gradual budgetary consolidation resumes with the 2021 economic rebound. - Positively, in March 2020, authorities widened the fluctuation band for the dirham from plus or minus 2.5% to plus or minus 5%, a further step on the gradual path of currency regime liberalization. - We believe the precautionary and liquidity line approved by the IMF and in place until December 2020 underpins the country's macrofinancial stability in the near term and its economic and budgetary policy objectives over the forecast horizon. - As a result, we are affirming our '###-/A-3' ratings on Morocco. - The outlook is stable....

Research Update