Moody’s: Positive Outlook for the Kingdom

In its evaluation report, Moody’s notes that “the positive outlook” reflects the gradual improvement in Morocco’s economic and fiscal strength, which could further strengthen its credit profile and, if this momentum is maintained, pave the way for a rating upgrade.

According to the agency, this revision of the outlook is supported by improved growth prospects for the country, driven by increased investment as well as the continuation of structural reforms aimed at transforming the economy and raising its growth potential. Although income per capita remains lower than that of higher‑rated countries, the agency believes that the combination of stronger growth, greater economic diversification, and a high level of investment suggests a structural improvement in Morocco’s growth profile.

The agency notably emphasizes that non‑agricultural growth has accelerated steadily in recent years and is expected to exceed 5% in 2025, reflecting a reduced dependence on more volatile agricultural production and enabling more stable and predictable growth in the future.

Moody’s also expects relatively strong growth momentum to continue, supported by significant public and private investments, particularly in transport, logistics, energy, and water infrastructure, as well as by the continuation of reforms aimed at improving the business environment and attracting more investment. These projects are expected to strengthen connectivity, improve logistical efficiency, mitigate certain climate‑related constraints, and support the competitiveness of the economy, while industrial policies contribute to the development of higher value‑added sectors and the strengthening of export capacities.

The agency also indicates that improved fiscal performance is another factor supporting this positive outlook, as it should help contain the debt burden over the medium term, despite persistent pressures related to social spending and investment needs. While the pace of fiscal consolidation remains relatively gradual and exposed to pressures, particularly those related to the implementation of social protection reforms, Moody’s believes that stronger revenue mobilization, a shift toward more targeted social spending, reforms aimed at limiting contingent liabilities of public enterprises, and diversification of funding sources for major investment projects should help mitigate these risks and strengthen the sustainability of public finances.

The agency also considers that the level of public debt could decline more than expected if these fiscal results are confirmed and if growth momentum is maintained.

Moody’s finally stresses that the confirmation of the Ba1 rating reflects the strength of Morocco’s institutions and governance, as well as the continued diversification of its economy. Prudent macroeconomic management, combined with an adequate level of foreign exchange reserves and satisfactory access to both domestic and external financing, contributes to strengthening the country’s macroeconomic resilience.

The upgrade of Morocco’s sovereign outlook from stable to positive reflects confidence in the country’s development vision under the enlightened leadership of His Majesty the King. It is the vision of a country consolidating its position as an emerging nation and aiming to include all its citizens and all its regions in its development momentum: an emerging Morocco developing at a single pace.

The rating agency Moody’s has raised the outlook on the sovereign rating of the Kingdom of Morocco from stable to positive, while maintaining the rating at Ba1. This development confirms the upward trajectory of the Kingdom’s sovereign rating, following the downgrade of the outlook to negative in 2021 due to the impacts of the health crisis and its revision to stable in 2022. At this stage, this represents a promising improvement, opening the way toward investment grade.