Highlights

Fitch Ratings confirms Morocco`s sovereign rating at `BBB-` with a stable Outlook : 08/11/2012

Fitch Ratings confirms Morocco`s sovereign rating at `BBB-` with a stable Outlook

The international rating Agency Fitch Ratings confirmed Wednesday, November 07th 2012, Morocco`s sovereign rating at `BBB-` with a stable Outlook.

The Agency underlined, in an official statement, that it confirms the Issuer Default Ratings (IDR) in the long term in foreign and local currencies assigned to Morocco at `BBB-` and `BBB` respectively, with a stable outlook.

Morocco`s IDR rating in the short-term is also confirmed at F3, indicates the Agency, noting that the sovereign ceiling rating of the Kingdom is confirmed at BBB.

Morocco`s BBB-rating is based on a strong macroeconomic performance, illustrated by a low inflation and a sustained growth of (GDP), stated the agency, stressing that the recent successes achieved by Morocco in managing the political transition indicated the political stability of the kingdom. Fitch Ratings noted that it expects this year to reduce budget and current account deficits thanks to measures taken recently to reduce oil subsidies.

The Agency emphasized that thanks to the economic policies and structural reforms initiated by the country, Moroccan real GDP recorded a strong growth in 2011, despite the economic difficulties affecting the Kingdom`s main economic partners in the euro zone.

Growth certainly slowed in 2012 due to a decline in agricultural output, the agency stated, but non-agricultural growth remained at 4.2% in the second quarter of 2012.

Fitch expects, in addition, a Moroccan GDP growth of around 5% in 2014, driven by a rebound in the agricultural sector and an upturn in the euro zone. This growth rate, calculated on the basis of the performance of the Moroccan economy during the last decade, will be supported, according to the Agency, by new investment projects.

The Agency also stresses that it expects a gradual improvement in current account deficit due to a possible decline in oil prices and a recovery of exports.

The Agency, which expects also a stabilization of international reserves in Morocco in 2013, reminds that Morocco obtained a precautionary credit line of $ 6.2 billion, granted by the International Monetary Fund. It emphasizes, in this sense, that Morocco does not intend to use this credit line and regards it as a kind of insurance.

Politically, Morocco is the most successful country in the region in responding to popular demands for change, indicates Fitch, recalling, in this context, the new Constitution voted for by Moroccans in 2011.

The Moroccan government adopted a gradual reform approach. its first policy measures suggest continuity in terms of economic policy, the source added, stressing that in the long-term , Morocco`s rating will benefit from the improvement of key social indicators ( poverty, GDP per capita, youth unemployment).