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Fitch Keeps Morocco's BB+ Rating Steady Amid Debt Concerns and Energy Costs
Fitch Ratings affirmed Morocco’s long‑term sovereign rating at BB+ with a stable outlook on September 17, 2026. The agency highlighted solid macroeconomic policies, ample external liquidity buffers and a relatively favourable debt profile, but warned of high public borrowing, climate exposure and a widening fiscal gap driven by the Ormuz Strait crisis. Fitch expects the central budget deficit to rise to 4 % of GDP in 2026 before easing to an average of 3.4 % in 2027‑2028, while public debt should stay around 67 % of GDP. Real GDP growth is projected to slow to 4 % in 2026 and average 4.2 % in 2027‑2028, with the current‑account deficit peaking at 3.8 % of GDP before narrowing to 2.6 %.
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Fitch Affirms Morocco BB+ Rating, Stable Outlook
\nFitch Ratings has confirmed Morocco’s long‑term sovereign rating at BB+ with a stable outlook on Thursday, September 17, 2026.
\nKey Strengths
\n- \n
- Robust macroeconomic policies and sound fiscal management. \n
- Adequate external liquidity reserves, valued at around $48 billion (end‑2025), providing roughly 5.1 months of coverage for current‑account outflows. \n
- Favourable debt structure: long maturities, substantial fixed‑rate instruments and significant use of concessional external financing. \n
- Strong official creditor support. \n
Areas of Concern
\n- \n
- High level of public debt – expected to remain near 67 % of GDP in 2028, well above the BB‑median of 51 %. \n
- Economic vulnerability to climate shocks and weather‑dependent agricultural output. \n
- Elevated exposure to external shocks, notably the Ormuz Strait crisis, which has driven up energy and transport costs. \n
- Below‑average governance and development indicators compared with peers. \n
Fiscal Outlook
\nFitch forecasts a temporary widening of the central government deficit to 4 % of GDP in 2026, up from 3.5 % in 2025, driven by higher subsidy bills, increased transfers to ONEE and additional support to transport operators.
\nDespite this, the deficit is expected to narrow to an average of 3.4 % of GDP in 2027‑2028 as the Ormuz‑related expenditures fade and energy prices normalise.
\nDebt Dynamics
\nPublic debt is projected to stay largely stable at around 67 % of GDP in 2028, unchanged from 2025. The debt’s maturity profile and reliance on concessional funding mitigate refinancing and currency risks.
\nGrowth and External Balances
\nReal GDP growth is seen slowing to 4 % in 2026 (from 4.9 % in 2025) owing to the Ormuz impact and softer demand from Europe. A good agricultural season, continued infrastructure investment and a resilient tourism sector should help growth average 4.2 % in 2027‑2028.
\nThe current‑account deficit is forecast to rise to 3.8 % of GDP in 2026, before easing to an average of 2.6 % of GDP in 2027‑2028 as energy prices stabilise and external conditions improve.
\nInvestment and Public Spending
\nBudgetary investment remains robust, averaging around 7.5 % of GDP, ahead of the 2030 World Cup. The bulk of capital spending is expected to be financed by public enterprises, PPPs and extra‑budgetary entities.
\nRisk Factors
\nPotential credit pressures could stem from cost overruns on major projects, higher fiscal support and materialisation of contingent liabilities. A sustained rise in debt‑to‑GDP, weaker growth prospects or deteriorating external buffers could trigger a downgrade.
\nConversely, a meaningful and lasting reduction in public debt, structural improvements in fiscal health, or stronger medium‑term growth outlook could support an upgrade.
\nConclusion
\nFitch’s decision to keep Morocco’s rating at BB+ with a stable outlook reflects a balanced view of the kingdom’s solid policy fundamentals and its exposure to fiscal and climatic risks. Investors should monitor the trajectory of debt, the resolution of the Ormuz‑related costs and the effectiveness of ongoing infrastructure and diversification efforts.