"Fitch Ratings" Agency lowered Morocco's credit rating to "high risk", indicating that the Coronavirus severely affected Morocco's financial conditions, which led to the downgrade of the rating from “BB-" to “BB+", disclosing that the Moroccan authorities are targeting the limit from the deterioration in the public finances, but the continuing impact of the pandemic on the budget and plans to expand the scope of social services amid rising unemployment will complicate efforts to stabilize the debt.
Moody's has not previously classified Morocco in the investment-worthy category for more than two decades, while Standard & Poor's places it at the lowest level in the investment-worthy category. However, it nominated Morocco this month to downgrade it.
A massive decline in tax revenues is expected to cause a significant deterioration of Morocco's fiscal deficit, which Fitch expects will rise to 7.9 percent of GDP in 2020 from 4.1 percent last year. According to Fitch, the jump in social spending after the government announced plans to grant aid, along with the possibility of a slow recovery in tax revenues, will make the deficit at about 6.5 percent of GDP next year and push the debt-to-GDP ratio close to 70 percent, compared to 56 percent in 2019.
Source (Al-Arab Newspaper-London, Edited)
