NEO Maroc

Moroccan debt. Since last year 2022, Morocco has witnessed a rise in the inflation rate. The national debt ceiling in Morocco has reached about $100 billion, an increase of 10 percent year on year, at a time when the Kingdom is witnessing high inflation rates and food prices in particular.

Moroccan debt

Moroccan debt

Although the connection of the Moroccan debt to the international economic situation reduces the seriousness of its value, according to experts, the Bloomberg Al-Sharq report confirmed that the Moroccan treasury debt reached 1,005 billion dirhams in April, compared to 905.5 billion dirhams for the same period last year, that is, an increase of 100 billion dirhams. Within 12 months.

According to official figures, the share of external debt in Rabat’s total debt amounts to 25 percent, while the remaining percentage is domestic debt.

External debt sensitivity

Public debt is divided into domestic debt and external debt. The latter is what often worries countries. It is from institutions such as the World Bank, and the receivables from it are part of the debt in addition to the interest.

External debt, which is usually allocated to investment, does not pose a risk, but if it is allocated to expenditures, it is worrying.

Borrowing thresholds

The relevant financial institutions consider that any country whose debt exceeds 60 percent has reached the red line, “however, there are major countries, such as the United States and Italy, that have exceeded 100 percent. However, the debt does not constitute a risk because it is directed to investment, which means expected returns and profits.”.

Morocco situation

Morocco knows a balance between consumption and investment, which means that there is a reassuring dynamic, and the debt allocated to consumption/expenditures comes especially due to energy and the drought that the Kingdom witnessed.

Since last year, Morocco has witnessed a rise in the inflation rate due to fluctuations in international markets and drought, which affected the agricultural sector, which is essential for economic growth in the Kingdom.

World Bank loans

Last March 2023, Morocco submitted an official request to the International Monetary Fund to obtain a “flexible line of credit” worth $5 billion, according to a statement from the International Financial Corporation, about a week after issuing international borrowing bonds worth $2.5 billion.

The Moroccan government was able to raise $2.5 billion by issuing borrowing bonds on the international financial market, at the beginning of this month, immediately after the country emerged from the “gray list” of the Financial Action Task Force.

Morocco is one of the most indebted

Morocco is one of the most indebted African countries. The Kingdom's total debt during the year 2022 amounted to 65.41 billion dollars, while the value of the external debt was approximately 65.72 billion dollars in 2020.

Morocco benefited from the “Prevention and Liquidity” line from the International Monetary Fund in 2012 and used it in 2020 to obtain $3 billion to confront the repercussions of the crisis resulting from the Coronavirus.

Economic growth bets

The government is betting that economic growth this year will reach 4 percent, while the Central Bank expects it not to exceed 2.6 percent.