Morocco Demonstrates Resilience, Earns Improved Rating in Allianz Trade's Country Risk Atlas
Allianz Trade, a credit insurance specialist, has released its inaugural Country Risk Atlas evaluating economic, political, commercial, and sustainable development factors influencing the risk of business defaults in 83 economies, including Morocco. The recent assessment reveals that Morocco's credit rating has been upgraded to "B2," signifying a medium level of risk, showcasing the country's resilience in the face of global challenges.
The Country Risk Atlas utilizes a six-level rating system ranging from "AA" to "D," with an additional short-term alert indicator measuring economic cycle and financing risks on a scale of 1 to 4. In its 2023 review of 21 economies, representing approximately 19% of global GDP, Allianz Trade observed an overall improvement in risk ratings for 17 countries, with only four experiencing downgrades.
The report highlights that Morocco, along with China, South Africa, Qatar, Algeria, Oman, Bulgaria, Tanzania, and Uruguay, has demonstrated resilience to global shocks. The study notes that Morocco's risk rating improvement to "B2" underscores its ability to withstand economic challenges and foster growth, outperforming other North African countries and surpassing major African economic powers like Nigeria and South Africa.
Despite facing challenges such as the Al-Haouz earthquake in September 2023 and a prolonged drought impacting agricultural production, Morocco's economy recorded a 2.6% GDP growth in 2023, slightly below the regional average. The tourism sector, particularly in Marrakech, has shown resilience, with tourism revenues exceeding $7 billion in 2022. Remittances also contribute significantly to foreign currency inflows, showing continued improvement.
Allianz Trade emphasizes the importance of social inclusion for sustainable growth, pointing out that diversification of the Moroccan economy has led to increased exports of automotive and textile products in 2023. The report anticipates a reduction in the trade deficit in 2024, driven by exports of agricultural goods, phosphates, and automobile components.
While Morocco has secured international financing through a $5 billion precautionary credit line from the IMF, addressing poverty and enhancing social inclusion remains crucial for long-term growth. The report notes that subsidies for butane gas, sugar, and flour contribute to the social contract. The implementation of the new investment charter is seen as a potential catalyst for foreign direct investment.
Allianz Trade also highlights the need to address water scarcity and applauds progress in liberalizing the electricity market to accelerate the transition to renewable energy. The services sector is the largest employer in Morocco, employing 47% of the workforce, followed by agriculture (29%), manufacturing (12%), and construction (11%). Despite improvements in the unemployment rate, particularly in urban areas, challenges persist for young people, university graduates, and women.
In conclusion, the report underscores Morocco's economic resilience, acknowledges progress, and outlines key areas for attention to ensure sustained and inclusive growth.