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nouncement: Moody's: Morocco's Ba1 rating is constrained by economic challenges and a high debt burden, but supported by improvements in its fiscal and external imbalances.
Global Credit Research - 07 Apr 2015
New York, April 07, 2015 -- The main constraints on Morocco's Ba1 rating are the country's still limited GDP per capita and relatively high but affordable debt-to-GDP ratio, says Moody's Investors Service in its annual credit analysis of the country.
"Weak labor market efficiency, limited innovation and pervasive skills mismatches limit Morocco's competitiveness and constrain the growth potential in the non-primary sectors," says Elisa Parisi-Capone, a Moody's Assistant Vice President -- Analyst and lead author of the report. Also a credit consideration is the foray of the large Moroccan banks into the sub-Saharan continent, which carries risks along with opportunities.
Supporting the rating is Morocco's successful reform of its energy subsidies, as well as the government's industrial policy agenda. These are the main drivers behind the improvement in the country's fiscal and external imbalances, as they reduce the government's exposure to volatility in oil prices and release funds for investment. Those positive trends led Moody's to change the outlook on its Ba1 rating for Morocco to stable from negative in September 2014.
According to Moody's, a sign of the success of the government's efforts to diversify its export base is that in 2014 automotive exports exceeded traditional exports such as phosphate and textiles in nominal terms for the first time. Foreign direct investment inflows and a reliable tourism industry also sustain the economy's structural transformation, the report says.
Source: Moody's
Global Credit Research - 07 Apr 2015
New York, April 07, 2015 -- The main constraints on Morocco's Ba1 rating are the country's still limited GDP per capita and relatively high but affordable debt-to-GDP ratio, says Moody's Investors Service in its annual credit analysis of the country.
"Weak labor market efficiency, limited innovation and pervasive skills mismatches limit Morocco's competitiveness and constrain the growth potential in the non-primary sectors," says Elisa Parisi-Capone, a Moody's Assistant Vice President -- Analyst and lead author of the report. Also a credit consideration is the foray of the large Moroccan banks into the sub-Saharan continent, which carries risks along with opportunities.
Supporting the rating is Morocco's successful reform of its energy subsidies, as well as the government's industrial policy agenda. These are the main drivers behind the improvement in the country's fiscal and external imbalances, as they reduce the government's exposure to volatility in oil prices and release funds for investment. Those positive trends led Moody's to change the outlook on its Ba1 rating for Morocco to stable from negative in September 2014.
According to Moody's, a sign of the success of the government's efforts to diversify its export base is that in 2014 automotive exports exceeded traditional exports such as phosphate and textiles in nominal terms for the first time. Foreign direct investment inflows and a reliable tourism industry also sustain the economy's structural transformation, the report says.
Source: Moody's
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