Moody's: Debt holding Morocco down

In its annual report on Morocco, Moody's said it Investors Service said its Ba1 government bond rating reflects a 10-year trend of improving general government debt ratios and significant structural reforms.

Morocco's debt ratios are higher than the average for its rating category and constitute the main reason preventing it from obtaining an investment-grade rating, the agency said.

The government bond rating serves as a basis for Morocco's Baa2 foreign-currency ceiling and Moody's assessment of a diminished likelihood of a payments moratorium in the event of a government default.

While the volatility of GDP and the government's fiscal stance have in the past capped the sovereign ratings, positive changes have been taking place in both these spheres, Moody's said it said. Improved resilience is mainly driven by the expansion of non-agricultural GDP growth, which has been rising as a result of structural and industry-specific reforms implemented by the government.

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