Standard and Poor's Creditwire in Morocco
Morocco, Economics, 2/10/1999

An expert delegation from Standard & Poor's CreditWire is currently visiting Morocco to carry out its first annual assessment of the rating it assigned to Morocco in 1998, the Moroccan press reported.

Last year, Standard & Poor's gave its double B long-term and single B short-term sovereign credit ratings to the foreign currency obligations of Morocco and its triple B long-term and A-3 short-term sovereign credit ratings to the country's local currency obligations.

The outlook on both the local currency and foreign currency ratings is stable, the specialized agency said in march 1998.

The ratings were constrained by an economy subject to volatile GDP performance, it said, explaining that Agriculture represents one-sixth of GDP, and over 1/4 of employment. Agriculture production swings widely, depending on rainfall, as only one-ninth of Morocco's land is irrigated, it added.

A high level of public sector and external debt was another constraint, the private agency said, adding that at a projected 107 percent of 1998 GDP and 146 percent of exports, total public sector debt and net external debt respectively exceed both single B and double B medians.

Standard & Poor's expected greater fiscal tightening and higher growth would enable Morocco to continue to reduce its debt burdens.

In the short term, Morocco's small current account deficits, low levels of short-term debt, healthy financial sector, and the high concentration of its external debt with official creditors reduce markedly its vulnerability to swings in foreign investors confidence.

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