In a report published on the level of external debt in Middle East and North Africa (MENA), Bloomberg, the news agency specializing in the economy and finance, takes a look at the external debt situation of Morocco. The study reveals that the Kingdom is more dependent on external borrowing than FDI, a decade back, and is “unable to repay its accumulated external debt.”
In the space of 10 years, Morocco’s external debt has jumped from 65% to 75% of GDP, reveals the Bloomberg Report. This leap obviously has repercussions on the growth rate of the Kingdom.
Conversely, the Report states that Morocco, like Jordan, has experienced more domestic stability over the last decade. These two countries, distant from each other, “initially took advantage of the situation in Tunisia and Egypt to attract more investors fleeing instability.”
All is not so rosy for Morocco. The study also shows that the broader regional and global contexts have hit Morocco hard. Indeed, the slowdown in the level of economic activity, internationally, and the recession in the euro area “have brought to light a lot of financial, economic and structural failures in Morocco.”
To reverse the trend, the Bloomberg Report suggests that the Kingdom should “target domestic investment in traditional sectors that can generate growth, job creation and possibly reduce dependence on certain imports” because it can be “to prove very difficult to rely solely on the development of exports or on FDI”, in the current global economic climate.