S&P: Morocco outlook positive

Standard & Poor's said it revised its foreign currency outlook on the Kingdom of Morocco to positive from stable and affirmed the BB/B foreign currency and BBB/A-3 local currency ratings on Morocco.

The local currency outlook remains stable.

"The revised foreign currency outlook reflects the strong improvement in Morocco's external liquidity, as well as an acceleration in structural reforms," said S&P credit analyst Luc Marchand.

S&P said Morocco's external position has been improving significantly in the past three years, thanks notably to a decrease in public sector external debt, sustained inflows of nonresident Moroccan remittances and privatization receipts, and the stabilization of the government's net borrowing requirement. External liquidity has improved to a level that compares very favorably with peers.

S&P noted the government has accelerated reforms that will reduce or partly offset key constraints on its credit standing, such as high (albeit gradually decreasing) fiscal deficits and debt, a narrow economic base, and high unemployment.

The ratings on Morocco are also supported by its relatively stable political environment, which is undergoing liberalization, and by prudent monetary policy.

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