Morocco Retains Ba1 Rating as Moody’s Confirms Stability

Rabat – Moody’s has concluded its periodic review of Morocco’s credit rating, keeping it at Ba1 without any changes.

The rating shows a stark mix of strengths and challenges, with effective policies and a solid domestic financing base counterbalanced by relatively low-income levels and risks in the public and banking sectors.

While debt continues to rise, Morocco has maintained social cohesion and supported its economy through recent shocks.

Economic growth slowed to 2.6% in 2024, down from 3.4% in 2023, as weak rainfall affected agricultural output. Analysts expect a rebound to 3.5% in the medium term, driven by structural reforms.

The budget deficit stood at 4.3% of GDP, slightly better than the 4.5% forecast, due to stronger-than-expected tax revenues. The current account deficit remained stable at 2.5% of GDP, supported by tourism, exports, and important remittances from Moroccans abroad.
Morocco continues to face structural challenges. Low per capita income and exposure to climate risks weigh on economic prospects, though higher-value industries are gradually expanding. The country benefits from a strong institutional framework and disciplined monetary and fiscal policies, earning a Baa2 governance score.

However, reliance on public sector activity and foreign currency debt, now at 17.6% of GDP, poses ongoing risks. The banking sector remains stable but shows vulnerabilities related to credit concentration and international operations.

Moody’s stable outlook signals confidence in Morocco’s ability to manage economic pressures.

The agency notes that successful economic and social reforms could enhance resilience and debt sustainability. However, rising public spending, particularly on infrastructure and social programs, may challenge fiscal stability.

An improved rating would require stronger non-agricultural growth, formal job creation, and reduced inequalities. On the other hand, a heavier debt burden, especially from public sector obligations, could put downward pressure on future assessments.