Fitch Ratings has confirmed Morocco's sovereign rating at BB+, maintaining a stable outlook. The rating agency identified the infrastructure program related to the 2030 World Cup as the primary risk factor affecting public finances. This rating places Morocco one notch below the investment-grade category, which could reduce external financing costs and broaden the investor base if upgraded.
According to Fitch's projections, Morocco's economy is expected to grow at 4% in 2026, a decline from 4.9% in 2025, and then averaging 4.2% from 2027 to 2028. The country's budget deficit is anticipated to be 4% of GDP this year, increasing from 3.5% in 2025, before improving to an average of 3.4% over the next two years. The public debt is projected to remain stable at around 67% of GDP until 2028.
Morocco's external sector is expected to see its foreign exchange reserves reach $48 billion by the end of 2025, providing coverage for 5.1 months of external payments from 2026 to 2028. However, the current account deficit is forecast to widen to 3.8% of GDP in 2026 before decreasing to an average of 2.6% thereafter. The agency expressed concerns over the 2030 World Cup infrastructure costs, not on the investments themselves but on their structure.
Fitch noted that the World Cup program is largely funded off-budget through public enterprises and public-private partnerships. This arrangement reduces the displayed deficit but transfers the risk to balance sheets that the state ultimately guarantees. Consequently, any cost overruns would eventually impact public finances. The agency also highlighted tensions in the Strait of Hormuz, which increase energy costs and transportation expenses.
These factors are the main channels through which international shocks affect Morocco's public accounts, via butane gas compensation and professional diesel fuel subsidies. The country's rating is closely monitored by investors, as an upgrade to investment grade could significantly alter its financing conditions. Currently, Morocco's rating is comparable to those assigned by other major rating agencies.
The stable outlook reflects Fitch's expectation that Morocco will maintain a stable macroeconomic framework despite external challenges. The agency's projections assume that the government will continue to implement economic reforms aimed at enhancing growth and reducing vulnerabilities. However, the rating could be affected by significant deviations from these projections, particularly if the World Cup infrastructure costs exceed anticipated levels.
In conclusion, Fitch's decision to maintain Morocco's rating at BB+ with a stable outlook reflects the country's solid economic fundamentals and its efforts to manage external risks. The focus on the 2030 World Cup infrastructure costs highlights the need for careful management of these investments to mitigate potential risks to public finances. Morocco's economic growth and fiscal management will be crucial in determining its future rating trajectory.
Key points
- The 2030 World Cup infrastructure program is identified as the primary risk factor affecting Morocco's public finances.
- Morocco's economy is expected to grow at 4% in 2026, declining from 4.9% in 2025.
- The country's public debt is projected to remain stable at around 67% of GDP until 2028.
