The international rating agency Standard & Poor's (S&P) has revised its outlook on the Kingdom of Morocco to negative from stable, reflecting the country's weakened fiscal stance and the pressures that high fiscal deficits are likely to exert on price and exchange rate stability.
The central government deficit reached nine percent of Gross Domestic Product (GDP) in 2001, and it is expected to fall to six percent of GDP next year, although this target may be missed if growth is less than expected, S&P noted. The debt burden, equivalent to 78 percent of GDP, has remained fairly stable in 2001. Interest expenses remain at more than 20 percent of revenues.
Nonagricultural growth remains between three-four percent per year, S&P’s asserted, although growth prospects for 2002 could be dented if the economic slowdown in Europe and heightened security concerns subdue developments in the tourism industry.
Morocco's external debt has been declining steadily over recent years and was expected to continue to improve gradually. However, severe drought, rising unemployment and budget deficit have steered the Moroccan economy off course, pushing international financial houses to lower their credit rankings for the North African state. Moody’s has also recently awarded Morocco a B-1 ranking, a stable-minus rating.
Treasury Minister Fathullah Oualalou recently asserted however that the national economy managed to evade a slowdown thanks to high privatization revenues, which offset the excessive expenditures allocated to overcoming the drought effects and protecting local consumers from rising oil prices, reported Al-Quds Al-Arabi .
The government received income of 23.3 billion Moroccan dirhams ($2.034 billion) from the partial privatization of Maroc Telecom in February 2001, giving the Treasury considerable flexibility in its debt management. As privatization opportunities are exhausted, however, S&P’s forecasts fiscal adjustment difficulties ahead. — (menareport.com)
© 2001 Mena Report (www.menareport.com)
