Rédaction Africa Links 24 with l’Opinion
Published on 2024-03-30 13:33:00
“These positive outlooks reflect our expectations that Morocco will build on its recent achievements in implementing socio-economic and budgetary reforms, paving the way for stronger and more inclusive growth and a reduction in budget deficits,” the rating agency emphasized in a statement released on Friday.
The Moroccan economy has shown “resilience” in the face of multiple shocks over the past five years and has maintained access to domestic and external financing, noted S&P Global, adding that “continuing the implementation of socio-economic and budgetary reforms will further formalize the economy and make it more inclusive and competitive, thereby stimulating GDP growth and reducing budget deficits, albeit gradually.”
“Budget and current deficits decreased more than expected in 2023, to 4.4% and 0.6% of GDP, respectively, and we expect budget consolidation to continue,” affirmed the American agency.
S&P Global indicated that it could upgrade Morocco’s rating in the next 12 to 18 months “if the government continues to implement structural reforms, fostering stronger economic growth and a broadening of the tax base, while budget deficits continue to decrease.”
On track for growth
“We believe that the ongoing, albeit gradual, change in Morocco’s underlying economic structure will benefit growth prospects, economic stability, and budget trajectory,” according to the statement.
The rating agency forecasts that Morocco’s GDP growth will reach 3.4% in 2024, up from 3.1% in 2023, supported by robust performances in the tourism, automotive, and aerospace sectors, before climbing to 3.7% in 2025-2027.
Economic growth will be supported by stronger domestic demand, aided by declining inflation and increased private investment, benefiting from ongoing economic reforms and stronger growth in the Eurozone, Morocco’s main trading partner, added S&P Global.
The Kingdom’s economy will also gradually benefit from the development of large-scale projects, given the organization of the Africa Cup of Nations in 2025 and the FIFA World Cup in 2030, the implementation of socio-economic reforms, and the expansion of Morocco’s export capacity, said the same source.
The rating agency also predicts that the budget deficit will decrease to 3% of GDP by 2027.
The Moroccan economy has faced several global, regional, and local headwinds in recent years, noted S&P Global, citing the surge in energy and food prices, the consequences of the COVID-19 pandemic, and multiple drought episodes.
In 2023, the number of tourist arrivals was 12.3% higher than the 2019 pre-pandemic level, noted the rating agency, noting that this is a performance “better than the global average,” despite the earthquake that struck the Marrakech region in the previous year.
“The current account deficit reduced to 0.6% of GDP in 2023, against our previous estimate of 2.7%, reflecting in part the ongoing diversification of the economy,” noted S&P Global, citing several measures taken by Morocco, including the establishment of a unified registry to better target households eligible for social assistance programs and the reform of the investment charter.
“The implementation of structural reforms and social support programs will limit the sharp decline in budget deficits in the short term, but will support budgetary consolidation in the medium and long term,” the agency stated.
In terms of prospects, the agency expects FDI flows to gradually increase in the coming years as the implementation of structural economic reforms makes Morocco more attractive to investors while highlighting the international financial community’s confidence in the Kingdom, as evidenced by the success of the bond issuance in March 2023.”
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