{"id":629394,"date":"2026-09-19T08:48:23","date_gmt":"2026-09-19T08:48:23","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/629394\/"},"modified":"2026-09-19T08:48:23","modified_gmt":"2026-09-19T08:48:23","slug":"fitch-affirms-morocco-at-bb-with-stable-outlook-despite-wider-2026-deficits","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/629394\/","title":{"rendered":"Fitch Affirms Morocco at BB+ With Stable Outlook Despite Wider 2026 Deficits"},"content":{"rendered":"

Marrakech \u2013 Fitch Ratings has affirmed Morocco\u2019s Long-Term Issuer Default Ratings at BB+ with a Stable Outlook, pointing to sound macroeconomic policies, adequate external liquidity buffers, and strong official creditor support.<\/p>\n

The agency said<\/a> these strengths translate into a relatively favorable debt profile. It balanced them against lower development and governance indicators, high government debt relative to peers, and the economy\u2019s exposure to adverse weather.<\/p>\n

The affirmation, published Thursday, comes as Fitch expects the central government fiscal deficit to widen to 4.0% of GDP in 2026, up from 3.5% in 2025. The agency tied the deterioration to temporary spending linked to the Hormuz Strait crisis.<\/p>\n

Higher energy prices lifted subsidy costs through larger butane gas compensation payments, continued support for transport operators, and higher transfers to the national electricity and water company. These outlays more than offset moderating revenue gains from tax reforms, stronger compliance, and improved collection.<\/p>\n

Fitch views the pressure as short-lived. It forecasts the deficit to average 3.4% of GDP in 2027-2028 as Hormuz-related spending fades and energy prices normalize, with tax revenue expected to hold broadly stable.<\/p>\n

On debt, Fitch projects central government debt to stay near 67% of GDP through 2028, unchanged from 2025 and well above the BB projected median of 51%.<\/p>\n

The agency said refinancing and exchange-rate risks are eased by a favorable debt composition marked by long maturities, a high share of fixed-rate instruments, and significant reliance on concessional external financing.<\/p>\n

Investment ahead of the 2030 FIFA World Cup features<\/a> prominently. Fitch expects the large infrastructure program to be financed mainly through state-owned entities, public-private partnerships, and other off-budget vehicles, with on-budget capital spending averaging 7.5% of GDP.<\/p>\n

Still, it warned that public finances face meaningful risks from cost overruns, added government support, or contingent liabilities that could eventually land on the sovereign balance sheet.<\/p>\n

The external accounts also weaken temporarily. Fitch sees the current account deficit widening to 3.8% of GDP in 2026 from 2.5% in 2025, before narrowing to an average 2.6% in 2027-2028.<\/p>\n

The move reflects a higher energy import bill after the Hormuz crisis and softer demand from Europe, Morocco\u2019s main export market, outweighing continued growth in phosphate exports and tourism receipts.<\/p>\n

Liquidity buffers remain a support. Foreign reserves stood at $48 billion at end-2025, and Fitch expects them to keep rising, averaging 5.1 months of current external payments over 2026-2028, above the BB median of 4.9 months.<\/p>\n

The agency noted that the IMF\u2019s April 2026 approval of a second two-year flexible credit line of about $4.5 billion adds a further cushion against external shocks.<\/p>\n

Growth is set to moderate. Fitch expects real GDP to slow to 4.0% in 2026 from 4.9% in 2025, then average 4.2% in 2027-2028, aided by another strong agricultural season backed by favorable rainfall.<\/p>\n

Politics figure into the outlook as well. With legislative elections scheduled for September 23 this year, Fitch does not expect the result to shift economic policy, and it sees the authorities staying focused on fiscal consolidation. The agency flagged that recent social discontent over spending priorities could push budgetary spending higher.<\/p>\n

On governance, Fitch placed Morocco at the 41st percentile of the World Bank Governance Indicators. It said political stability has held over the past decade, even as social tensions have driven recurrent protests amid high unemployment, particularly among urban youth.<\/p>\n

Read also: Morocco Among Top Weightings in JPMorgan\u2019s New Frontier Local-Currency Bond Index<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Marrakech \u2013 Fitch Ratings has affirmed Morocco\u2019s Long-Term Issuer Default Ratings at BB+ with a Stable Outlook, pointing…\n","protected":false},"author":2,"featured_media":629395,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,20031,16936,61,60,236537],"class_list":["post-629394","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-fitch","tag-fitch-ratings","tag-ie","tag-ireland","tag-moroccan-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/629394","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=629394"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/629394\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/629395"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=629394"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=629394"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=629394"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}