Morocco has regained investment-grade status from Standard & Poor’s (S&P), which on Thursday upgraded the kingdom’s sovereign rating to BBB-/A-3.
The move restores a label Morocco lost in 2021 during the pandemic downturn and makes it the only African sovereign borrower currently rated investment-grade by S&P, Morocco World News reported.
The return to investment grade comes after years of hovering near the threshold. Morocco had been rated BBB- until 2021, when the impact of the pandemic led to a downgrade to BB+. In March 2024, S&P shifted the outlook from stable to positive, signaling the likelihood of this week’s upgrade.
According to the agency, the decision follows a mission conducted in Morocco in September and reflects the country’s ability to withstand successive shocks, including the COVID-19 pandemic, global supply-chain disruptions, and recent U.S. trade tariffs. In its report, S&P highlighted Morocco’s “structural reforms and macroeconomic policies” that have supported public finance stability and economic diversification.
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The upgrade positions Morocco among sovereigns considered reliable by international bond markets, placing it on par with countries such as Hungary and Oman, while most of the African continent remains below investment grade.
It also marks a divergence from a broader global pattern of downgrades. Moody’s in May lowered the United States by one notch, while advanced economies like France and Italy face rising fiscal concerns.
For Morocco, regaining investment-grade status translates into lower borrowing costs and renewed investor confidence, with the potential to attract more foreign direct investment as the government prioritizes infrastructure, industrial policy, and energy transition projects.
S&P projects Morocco’s real GDP growth will average 4% between 2025 and 2028, while the budget deficit is expected to narrow to 3% of GDP by 2026 and the current-account deficit to remain around 2% of GDP over the same period.
The agency also noted the kingdom’s socio-economic and fiscal reforms, which are promoting economic diversification and encouraging formalization.
Despite the positive development, challenges remain. Agricultural volatility tied to climate change, persistent inequality, and debt sustainability will all influence Morocco’s ability to maintain its regained investment-grade ranking.
This marks the second upgrade by S&P in recent months, following the March 2024 revision that lifted Morocco’s outlook from “stable” to “positive.” The consecutive upgrades come at a time when many countries, including developed economies, are experiencing sovereign downgrades.
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