Morocco's real gross domestic product (GDP) growth is expected to rebound to 4.8% in 2021, driven by an easing of the disruptions from the health crisis and improved rainfall following a two-year drought, MAP news agency reported citing U.S. rating agency Fitch forecasts.
This growth will remain expansionary until at least 2022, said Fitch in a summary note published on its website, estimating that the launch of a strategic investment fund, called "Mohammed VI Fund for Investment", should support the economic recovery in the Kingdom.
In addition, Fitch Ratings affirmed Morocco's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'BB+' with a Stable Outlook.
"Morocco's 'BB+' rating is underpinned by a record of macroeconomic stability reflected in relatively low inflation and GDP volatility pre-pandemic, a moderate share of foreign-currency (FC) debt in total general government (GG) debt, and relatively comfortable external liquidity buffers", Fitch explains.
External resilience is also underpinned by Morocco's fairly comfortable foreign reserves and improved exchange-rate flexibility, the same source adds.
“We forecast foreign reserves to increase slowly in 2021 and 2022 after shooting up to USD32.2 billion at end-2020 from USD25.3 billion in 2019. We forecast foreign reserves will cover 7.5 months of current external payments on average in 2021-2022, higher than the 'BB' median of 5.4 months,” the same source notes.
Large fiscal deficits will drive a further rise in government debt despite the economic rebound, according to Fitch Ratings.
“We forecast GG debt will increase to 68.8% of GDP in 2021 and 70.5% in 2022 from 66.8% in 2020, exceeding the projected 'BB' median of 59.1% in 2022,” the same source adds.
“We project debt to be broadly stable from 2023 onwards,” it notes.
Regarding the key sector of tourism (6.7% of GDP in average annual gross current account receipts in 2017-2019), it will remain “depressed” in 2021 after gross foreign tourism earnings collapsed 70% year-on-year in April-December last year, the U.S. rating agency points out.
