The ratings on the Kingdom of Morocco are constrained by its: High fiscal deficit. The central government deficit reached 9% of GDP in 2001, and is expected to fall to 6% of GDP next year, although this target might not be achieved if growth is less than expected. The debt burden (78% of GDP) has been fairly stable in 2001, with the higher deficits funded by proceeds from privatizations. As privatization opportunities are exhausted, however, fiscal adjustment difficulties will loom, particularly since some of the privatization money has been used to expand operating expenditures. If planned asset sales fail to materialize in 2002, as occurred in the last quarter of 2000, domestic expenditure arrears might grow as expenditure flexibility dwindles.
