Research Update: Morocco Outlook Revised To Negative On COVID-19-Induced Rise In Debt And External Financing Needs; Ratings Affirmed

Due to severe COVID-19 impacts on Morocco's external and domestic demand, real GDP will likely contract by about 5.5% in 2020 before gradually recovering from 2021. The government has introduced extraordinary budgetary countermeasures that, alongside the cyclical impact of the recession, are set to widen the central government deficit to about 7.7% of GDP in 2020, with net government debt likely to reach 65.9% of GDP. We expect the current account deficit to expand to 6.4% of GDP this year before strengthening only slowly in 2021-2023, heightening the economy's gross external financing needs. We are therefore revising our outlook on Morocco to negative from stable, and affirming the ratings at 'BBB-/A-3'. On Oct. 2, 2020, S&P Global Ratings revised its

...- Due to severe COVID-19 impacts on Morocco's external and domestic demand, real GDP will likely contract by about 5.5% in 2020 before gradually recovering from 2021. - The government has introduced extraordinary budgetary countermeasures that, alongside the cyclical impact of the recession, are set to widen the central government deficit to about 7.7% of GDP in 2020, with net government debt likely to reach 65.9% of GDP. - We expect the current account deficit to expand to 6.4% of GDP this year before strengthening only slowly in 2021-2023, heightening the economy's gross external financing needs. - We are therefore revising our outlook on Morocco to negative from stable, and affirming the ratings at '###-/A-3'....

Research Update