(3 Minutes read)
Morocco’s government debt is sustainable as efforts are ongoing to cut it further below 70% of GDP, finance minister Nadia Fettah Alaoui said. The minister remarked this in response to the criticism by opposition MPs who warned of the risk of debt unsustainability. Debt to GDP ratio was brought below 70% this year and the government is committed to maintain this downward trend.
The share of domestic debt in the treasury’s debt portfolio exceeds 75%. Secondly, the structure of the debt is essentially long-term and its average cost is around 3%. This debt is mainly (90%) backed by fixed rates,” the minister added. She highlighted the improvement of Morocco’s ranking by rating agencies, noting that Standard & Poor’s revised Morocco’s outlook from “Stable” to “Positive”.
The minister in charge of the budget said Morocco would not use debt to fund the expansion of its safety net programs, such as mandatory health coverage and financial aid to the needy.The government would rather meet rising social spending through reforms that increas tax revenue and through fiscal consolidation, he said. This fiscal consolidation earned Morocco improved ratings by S&P and Fitch ratings, while the IMF and World Bank praised in their recent reports the resilience of Morocco’s public finances.
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The national debt in Morocco was forecast to continuously increase between 2024 and 2029 by in total 24.8 billion U.S. dollars (+23.17 percent). After the tenth consecutive increasing year, the national debt is estimated to reach 131.84 billion U.S. dollars and therefore a new peak in 2029. Notably, the national debt has continuously increased over the past years.
