Real gross domestic product (GDP) growth in Morocco is expected to rebound to 4.8% in 2021, driven by an easing of disruptions linked to the health crisis and better rainfall after two years marked by drought, predicts the American agency Fitch Ratings.
This growth would continue until at least 2022, indicates Fitch in a briefing note published on its website, estimating that the launch of a strategic investment fund, baptized “Mohammed VI Fund for the Investment”, should support the economic recovery in the Kingdom.
In addition, the rating agency confirmed the default rating of Morocco’s long-term foreign currency issuers at “BB+” with a stable outlook.
“Morocco’s ‘BB+’ rating is supported by a record of macroeconomic stability reflected by relatively low inflation and GDP volatility before the pandemic, a moderate share of foreign currency debt in total government debt and liquidity relatively comfortable exterior,” says Fitch.
They added that external resilience is also supported by “Morocco’s fairly comfortable foreign exchange reserves and by better exchange rate flexibility”.
“We expect foreign exchange reserves to slowly increase in 2021 and 2022 after climbing to $ 32.2 billion at the end of 2020, from $ 25.3 billion in 2019. We expect foreign exchange reserves to cover 7.5 months of current external payments on average in 2021-2022, more than the ‘BB’ median of 5.4 months”, indicates the same source.
Thus, the rating agency estimates that large budget deficits will lead to a further increase in public debt despite the economic recovery.
“We forecast that the public debt will increase to 68.8% of GDP in 2021 and 70.5% in 2022 against 66.8% in 2020, exceeding the projected median “BB” of 59.1% in 2022″, predicting that the debt would be broadly stable from 2023.
On the tourism side, Fitch notes that this key sector (6.7% of GDP in average annual gross receipts of the current account in 2017-2019) would remain “depressed” in 2021, after the collapse of gross foreign tourism receipts of 70% on one year in April-December of last year.