Fitch Ratings: Morocco's «BBB-» rating maintained

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Fitch Ratings./ Ph. DR

US rating agency Fitch Ratings announced Thursday it is holding the BBB- rating for Morocco with a stable outlook. A statement from the agency said that «Morocco's BBB- rating is boosted by its macroeconomic stability, its comfortable reserves and a small share of foreign currency debt in the public debt…This is counterbalanced by weak development and governance indicators, high levels of public debt, and budget and current account deficits that far outweigh the peers», the source said.

Fitch also predicts that the public deficit will reach 3.7% of GDP (without privatizations) in 2019, in line with the fiscal target and the result of 2018, and 3.5% by 2020. «In the medium term, the government plans to reduce the budget deficit by broadening the tax base and strengthening the application of tax laws, limiting the wage bill and making efficiency gains in social spending through improved targeting», the statement said.

The rating agency also predicts a net external debt that will rise from 14.6% in 2017 to 17.2%of GDP in 2019, well above the current median of «BBB» and foreign direct investment stable at 2% of GDP «attracted by the modernization of infrastructures, the improvement of the business environment and the incentives offered as part of the government's industrialization strategy». Fitch also predicts that the «economic growth is expected to be broadly stable until 2020. The unfavorable base effects of the agricultural sector are expected to slow GDP growth from 4.1% in 2017 to 3.2% in 2018 and 2.8% in 2019, before rising to 3.5%».

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