Moody’s raises Morocco’s economic outlook to positive, retains Ba1 rating

The global credit rating agency Moody’s has upgraded Morocco’s economic outlook from “stable” to “positive,” while keeping the sovereign credit ratings at Ba1 for both local and foreign currency.

Strengths underpinning the rating

In its latest assessment, Moody’s highlighted several strengths supporting Morocco’s current rating: robust institutions, sound macroeconomic management, a diversified economic base, adequate foreign exchange reserves, and broad access to both domestic and international financing options.

The agency noted in its report that the positive outlook reflects “steady improvements in Morocco’s economic and financial strength, which enhance the country’s credit profile.” Moody’s emphasized that ongoing economic reforms aimed at accelerating income growth, increasing formal employment, and reducing social and economic disparities could further support a rating upgrade in the future.

For country ceilings, Morocco’s local currency ceiling is Baa1—three notches above the sovereign rating—while the foreign currency ceiling stands at Baa2, one notch below the local currency ceiling.

Economic momentum

Moody’s observed Morocco’s resilience and strong growth, underpinned by structural reforms and increased investments. The report indicated that Morocco’s GDP grew by 4.9% in 2025, up from 3.8% in 2023–2024, with non-agricultural sectors recording growth above 5%, reducing reliance on agriculture and climate-sensitive sectors.

The agency also noted that major infrastructure projects in transport, logistics, energy, and water contribute to enhanced competitiveness and attract private investment.

Fiscal performance

Morocco’s fiscal discipline was praised, with improvements in revenue collection and a significant reduction in the general government deficit from 7.1% of GDP in 2020 to 3.5% in 2025. Public debt is expected to decline to 64% of GDP by 2027, down from 66% in 2024. Tax reforms, including changes to corporate, value-added, and income taxes, were credited with increasing budget flexibility against economic shocks.

Remaining challenges

Despite the positive outlook, Moody’s noted ongoing risks:

• Climate and water stress: Agriculture contributes 10–15% of GDP and employs 35% of the workforce.

• High youth unemployment: 37.7% of those aged 15–24 were unemployed in early 2025.

• State-owned enterprises’ obligations: Potential fiscal pressures remain from public sector liabilities.

• Income disparities and low female labor participation: Female participation stands at 21% (2021 data).

Moody’s indicated that continued strong, inclusive growth and sustained debt reduction could lead to a rating upgrade, whereas slower growth or setbacks in fiscal consolidation could revert the outlook to stable.