Morocco’s fiscal outlook steady as protests wane, says Fitch

Wednesday 12 November 2025 - 08:20

By: Dakir Madiha

Morocco’s fiscal outlook steady as protests wane, says Fitch

Morocco’s 2026 draft budget reflects a commitment to fiscal discipline, despite the nationwide protests that took place in September, according to Fitch Ratings. The agency affirmed Morocco’s “BB+” credit rating with a Stable Outlook in September, highlighting that the government’s measured approach to spending prioritizes long-term stability over short-term political responses.

The proposed finance bill, presented to parliament on October 20, projects a budget deficit reduction to 3% of GDP in 2026, compared to 3.6% in 2025. Spending is forecasted to drop to 26.8% of GDP, driven by tighter wage controls and lower interest payments on debt, while maintaining steady levels of investment spending.

Fitch described the fiscal projections as “credible” and aligned with its forecast of an average budget deficit of 3.1% for 2026-2027. Revenues are expected to decrease slightly to 23.8% of GDP due to a gradual phase-out of “innovative financing” mechanisms, although higher corporate tax receipts will partially offset the decline. This shift toward sustainable revenue generation is seen as a step toward greater fiscal consolidation.

The country’s public debt is projected to fall to 66% of GDP in 2026 from 67% in 2025, although it remains above the median level for “BB”-rated sovereigns. However, Fitch cautioned that planned infrastructure projects tied to Morocco’s co-hosting of the 2030 FIFA World Cup, estimated at around 18% of GDP, could introduce fiscal risks if state guarantees or direct budget financing rise.

Despite these challenges, Fitch remains confident in Morocco’s fiscal trajectory. The agency noted that September’s GenZ212 protests are unlikely to impact political stability or economic governance, underscoring the government’s ability to maintain a steady fiscal course.