Moody's lowers Morocco view to stable

Moody's Investors Service said it changed the outlook on the government of Morocco's long-term issuer ratings to stable from positive and has affirmed the Ba1 issuer ratings.

The outlook revision reflects a view that the pace of fiscal consolidation will be slower than previously assumed, implying that the central government debt-to-GDP ratio will peak later and at a level that exceeds the median debt ratio of peers at similar rating levels, Moody's said.

Lower-than-expected fiscal space will constrain the government's capacity to absorb domestic or external shocks in a tightening global financial environment, the agency said.

The slower-than-expected pace of fiscal consolidation reflects a slight weakening of institutional strength, specifically policy effectiveness, Moody's said.

The ratings balance the credit challenges posed by comparatively low wealth levels against the demonstrated resiliency of Morocco's credit profile, supported by the government's access to relatively deep domestic capital markets, the agency said.

This helps shield the government from international capital market volatility, Moody's said.

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