Fitch Ratings has affirmed Morocco's long-term sovereign rating at BB+ with a stable outlook, marking the ninth consecutive time this level has been maintained since May 2021. The rating agency cited sound economic policies, sufficient external liquidity, and strong support from official creditors as factors contributing to the stability. However, Fitch also noted significant weaknesses, including a high public debt and declining governance and development indicators compared to countries with similar ratings.
Morocco's public debt is expected to remain high, reaching 67% of GDP by 2028, significantly above the 51% average for countries rated BB. Despite this, Fitch noted that the structure of Morocco's debt is favorable, with long maturities and a high proportion of fixed-rate instruments. The agency also highlighted that a large portion of the debt is financed through external funding with preferential terms.
The budget deficit is expected to widen to 4.0% of GDP in 2026, driven by temporary spending related to the crisis in the Strait of Hormuz, which increased the cost of supporting butane gas, transportation, and transfers to the National Office of Electricity and Drinking Water. Fitch forecasts that the deficit will decline to an average of 3.4% between 2027 and 2028 as support costs decrease.
The current account deficit is expected to widen to 3.8% of GDP in 2026, driven by higher energy costs and weak European demand, before returning to an average of 2.6% in 2027 and 2028. Morocco's foreign exchange reserves stood at $48 billion at the end of 2025 and are expected to cover an average of 5.1 months of imports between 2026 and 2028.
Economic growth is expected to slow to 4.0% in 2026, affected by the crisis in the Strait of Hormuz and its impact on energy costs and external demand. However, growth is expected to stabilize at an average of 4.2% between 2027 and 2028 as external conditions improve. The country's preparations to host the 2030 World Cup are expected to support investment, with a significant portion of spending to be financed through public institutions and public-private partnerships.
Fitch highlighted structural weaknesses in Morocco's governance indicators, ranking 41st in the World Bank's governance indicators. The country scored 5 out of 5 in terms of political stability, rule of law, and institutional quality, and 4 out of 5 in terms of human rights and political freedoms. These factors are considered to have a negative impact on Morocco's creditworthiness.
The rating affirmation reflects Fitch's assessment of Morocco's balanced economic policies and external liquidity, against the backdrop of high public debt and governance challenges. The agency's outlook is stable, reflecting its expectation that Morocco will maintain its economic stability and make progress in addressing its structural challenges.
Key points
- Morocco's public debt is expected to remain high, at 67% of GDP by 2028.
- The country's governance indicators are a structural weakness, ranking 41st in the World Bank's governance indicators.
- Economic growth is expected to slow to 4.0% in 2026 before stabilizing at an average of 4.2% between 2027 and 2028.
