Despite a widening budget deficit and a high debt-to-GDP ratio, Morocco’s economic outlook seems reassuring given the government’s commitment to structural reforms, Capital Economics said. “On the face of it, Morocco’s public finances are starting to look alarming,” the London-based think tank said in a briefing released on Wednesday. “The composition of Morocco’s public debt suggests that fiscal risks are smaller than they appear at first sight,” Capital Economics said. The think tank expects the public debt-to-GDP ratio to fall to 67% by 2027 if the Moroccan government adopts a fiscal squeeze of only 1.5% over the next few years. “Putting all of this together, we think that the recent increase in Morocco’s government debt-to-GDP ratio and the budget deficit will turn the corner,” Capital Economics concluded.
