On September 27, Moody’s reaffirmed Morocco’s Ba1 rating for its long-term obligations and senior unsecured debt, maintaining a stable outlook. This decision highlights the country’s robust institutional foundations and balanced external position, while also acknowledging the socio-economic challenges that complicate the government’s fiscal objectives.
Moody’s Ba1 rating underscores the stability of Morocco’s institutions, which have shown resilience in the face of external crises. Key reforms in healthcare, education, and social protection, alongside prudent price management by Bank Al-Maghrib, have bolstered the country’s institutional strength. Additionally, the gradual liberalization of the exchange rate since 2018 has played a crucial role in this stability.
However, Morocco continues to face persistent challenges, particularly low income levels and significant socio-economic inequalities. These hurdles complicate the government’s efforts to reduce public debt while addressing increasing social demands and financing critical development investments.
Despite these obstacles, Moody’s expects Morocco’s public debt to stabilize at around 65% of GDP in the coming years, reflecting the country’s balanced fiscal management. Reforms aimed at increasing economic resilience to shocks are ongoing, though fiscal pressures are rising due to infrastructure investments and social security reforms.
The financial burden of hosting the 2025 Africa Cup of Nations and the 2030 World Cup presents a major challenge, which Morocco plans to mitigate through increased reliance on public-private partnerships.
Moody’s also highlighted the geographic and social disparities hindering economic growth. Morocco’s labor market is characterized by high informality and significant youth unemployment, exacerbating inequality across the country.
While efforts to diversify the economy toward high-value sectors such as renewable energy are underway, these reforms have yet to yield immediate results. Additionally, managing water scarcity, which is critical for the agricultural sector, remains a significant challenge.
The Ba1 rating also reflects Morocco’s vulnerability to climate and social risks. Environmental factors, particularly the country’s reliance on rain-fed agriculture, along with regional and gender inequalities, continue to weigh on inclusive growth.
According to Moody’s, accelerating reforms and better risk management could improve Morocco’s standing on the international stage. However, an increase in public debt or unexpected social spending could negatively impact the country’s future rating outlook.
