Budget to narrow de cit but Moody’s downgrades

In December 2018 Morocco’s parliament approved the 2019 budget that forecasts the de cit narrowing to a headline of 3.3% of GDP in 2019. However the budget passed on a vote of 189-83 marked by the absence of several ministers. The bill did not reveal details of the privatisation programme which was later revealed to include La Mamounia Hotel and the Tahaddart power plant, which produces one-tenth of Morocco’s total energy consumption. This will still leave it short of the testing demand of the IMF for a budget de cit of 2% in the medium term as part of the fund’s Precautionary Credit Line. The 2019 budget envisages an underlying scal de cit at 3.7% — excluding privatisation receipts — and a slower than previously anticipated pace of scal consoli- dation over the next three years In November 2018 Moody’s, the rating agency, downgraded its outlook to stable from positive saying that he pace of scal consolidation would be slower than previously assumed. It said the central government debt/GDP ratio would peak later and at a level that exceeded the median debt ratio of peers at similar rating levels. It maintained its Ba1 rating. It said that the government was on track to record a de cit of 3.8% of GDP for 2018 rather than the budgeted 3.0%.