Dagong lowers Morocco's credit rating outlook to negative
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Xinhua, October 10, 2011
Chinese ratings provider Dagong Global Credit Rating Co. said Monday it maintained the local and foreign currency sovereign credit rating of Morocco as BBB+, but downgraded the outlook from stable to negative.
Dagong said it expects Morocco's fiscal position to deteriorate and its solvency to decline as weaknesses in Morocco's political institutions and economic structure will become more apparent due to the worsening European and American debt crises.
As Morocco's economy largely depends on developed countries, the escalating debt crises in Europe and the United States will continue to have adverse impacts on the country's merchandise and service trade, which will result in a decline of foreign direct investment inflows.
Dagong said it estimates the country's economy will grow at 4.4 percent over the next two years and will maintain mild growth in the medium- and long-term.
Dagong said Morocco's trade deficit will further expand as its major trading partners remain deeply mired in debt crises.
The deficit ratio of the country's central government will stand at 6.1 percent in 2011 and 5.7 percent in 2012, Dagong estimated.
A gross debt-to-GDP ratio of Morocco's central government is expected to reach 49.8 percent and 50.3 percent this year and next, respectively, Dagong said.
Morocco will keep its external debt-to-GDP ratio at above 29 percent over the next two years.
However, the country's risks of external debt solvency will remain controllable in the medium-term, due to Morocco's relatively small foreign debt burden and its strict management of external debt, Dagong said.
