Moody's report upbeat about Morocco's economic prospects

Morocco's long-term foreign currency ceiling incorporates the government's strong commitment to sound economic policy, says "Moody's Investors Service" in its annual report on Morocco.

"Despite occasionally adverse circumstances, the authorities have maintained the level of macro-economic stability they achieved in the late 1980s, and have made significant progress on structural reforms, particularly privatization," the international rating firm says.

A free trade agreement with the EU will stimulate corporate restructuring, while 10 years of relatively narrow current account deficits and some debt relief have enabled Morocco to hold its stock of external debt more or less constant since the late 1980s.

As a result, debt ratios have improved steadily since 1985. Although a heavy debt burden remains, the authorities' willingness to maintain a stable policy environment suggests that debt ratios are likely to continue to improve, according to Moody's.

Moody's believes that a conservative and still largely rural population may leave Morocco less vulnerable to social pressures than some of its neighbors. Even so, faster growth will be essential to secure support for the government's program of liberalization, and to ensure political stability.

Moody's also noted that political parties and the press in Morocco "enjoy more freedom of activity than in most of the Arab world."