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Standard & Poor’s Raises Morocco's Rating Outlook From Negative to Stable

Standard & Poor’s Raises Morocco's Rating Outlook From Negative to Stable
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Standard & Poor’s Raises Morocco's Rating Outlook From Negative to Stable

Standard & Poor’s Raises Morocco's Rating Outlook From Negative to Stable

Standard & Poor’s (S&P’s) has maintained Morocco's credit rating at the current level of BBB- / A-3, revising its outlook from negative to stable.

In its report, the rating agency projected Morocco's real GDP growth to be about 2.8 percent this year, constrained by the decline in external demand and agricultural output, rebounding to about four percent by 2021.

It said the country's budgetary position should gradually improve, supported by the government's comprehensive budgetary strategy and privatization proceeds over the forecast period, to reach three percent of GDP in 2022.

S&P’s also believed the precautionary and liquidity line approved by the International Monetary Fund (IMF) in December 2018 underpins Morocco's macro-financial stability and its economic and budgetary policy objectives.

As a result, it revised the outlook on the country to stable from negative and affirmed its 'BBB-/A-3' ratings on Morocco.

It pointed out that it could raise the rating if budgetary consolidation prospects materially improve or the ongoing transition toward a more flexible exchange rate that targets inflation significantly bolsters Morocco's external competitiveness and ability to withstand macroeconomic external shocks.

It could also raise the ratings if Morocco's ongoing economic diversification strategy results in less volatile and higher rates of economic growth.

Conversely, it noted in its report that it could lower the rating if the government deviates from its fiscal consolidation plan, resulting in substantially higher government debt compared with our forecast, real GDP growth rates significantly undershoot its expectations or external imbalances widen, resulting in a significant increase in the economy's gross financing needs.

It didn’t expect the public sector wage hike to affect its budgetary outcome, given that it had already been budgeted for, expecting additional savings from lower-than-budgeted government subsidies for liquefied petroleum gas (LPG), due to the implementation of a hedging strategy.

Given the government's commitment to privatize some assets from 2019-2024, it expected the change in net general government debt--its preferred indicator of fiscal flows--to decline as of 2019.

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FAO Aims for Key Outcomes at COP16 in Saudi Arabia

Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
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FAO Aims for Key Outcomes at COP16 in Saudi Arabia

Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)
Preparations in the Saudi capital ahead of hosting the COP16 conference on combating desertification (from the “COP16” page on the X platform)

Dr. Abdul Hakim Elwaer, Assistant Director-General of the Food and Agriculture Organization (FAO), stated that the organization will take an active role at COP16, the UN conference on combating desertification, scheduled to take place in Saudi Arabia in early December.

In remarks to Asharq Al-Awsat, he expressed confidence that the conference—the first of its kind in the Middle East—would produce significant outcomes.

Elwaer’s comments came during a roundtable organized by FAO’s regional office in Cairo, attended by a select group of media representatives. The session focused on FAO’s participation in the upcoming conference and the importance of the Rio Trio —the integrated framework of the three major UN conventions addressing climate change, biodiversity conservation, and desertification.

Fida Haddad, FAO’s Program Officer for Land Rehabilitation and Climate Change, highlighted the interconnectedness of the three conventions and noted that COP16 would place a strong emphasis on land and water rehabilitation and their sustainable management.

Haddad pointed out that approximately 90% of the Middle East is affected by arid conditions. Despite this, local communities and Arab governments have made notable progress in addressing desertification and drought. She also announced that, for the first time, FAO has successfully placed food systems on the COP16 agenda, enabling discussions on how land rehabilitation can enhance food supply chains and systems.

Elwaer underscored FAO’s central role in achieving the second Sustainable Development Goal (SDG): eradicating hunger. He emphasized that FAO actively engages in the UN conventions on climate change, biodiversity, and desertification, which collectively contribute to this mission.

FAO’s focus, according to Elwaer, is on transforming food and agricultural systems to become more inclusive, efficient, and sustainable, aiming for better production, nutrition, and livelihoods. He highlighted the organization’s success in integrating these priorities into the agendas of the three conventions and collaborating with host countries on joint initiatives.

He further noted that Saudi Arabia’s hosting of COP16 is particularly significant for the region, which faces pressing challenges such as water scarcity, desertification, and food insecurity. The conference presents an opportunity for Middle Eastern nations to highlight these issues, explore solutions, and ensure their inclusion in global environmental discussions, not only at this event but in future COP sessions, he underlined.

Elwaer emphasized the growing global attention on desertification, as it is now impacting regions previously unaffected, such as southern Europe and parts of Latin America. These areas are witnessing alarming declines in arable land and forests, prompting them to seek lessons from the Arab world, which has developed resilience strategies to combat desertification over centuries.

FAO will have a strong presence at COP16, with two dedicated pavilions—one in the Blue Zone for official delegations and another in the Green Zone to engage civil society and conference participants, he said.

He added that in collaboration with Saudi Arabia and the UN, FAO will lead coordination on Food Day and Governance Day, scheduled for December 5 and 6, respectively. The organization will also participate in other specialized sessions throughout the conference.