The rating agency Fitch Ratings downgraded the long-term foreign currency default issuer rating from BBB- to BB+ on Friday, with a stable outlook for Morocco.
In its briefing note, the agency refers to “the severe impact of the coronavirus pandemic on the Moroccan economy and on public and external finances”.
“A drop in tax revenues and a historically large contraction of GDP will lead to a significant increase in public debt, while the blow to industry and tourism will lead to a significant worsening of the current account deficit and of the net foreign debt at from already high levels,” Fitch Ratings said.
The American agency expects Morocco’s budget deficit to deteriorate: “We expect the central government (CG) deficit to stand at 7.9% of GDP against 4.1% in 2019.”
The loss of Morocco’s investment grade by Fitch Ratings comes after a negative outlook for the BBB- rating maintained last April.