Morocco's commercial banks are exposed to the risks that will come with the coronavirus pandemic, according to an analysis by Fitch Ratings. These risks are however still manageable thanks to the current stable macroeconomic situation in this North African country.

According to Fitch, Morocco’s GDP growth was seen at 3.5% at the end of 2019, compared to 2.7% in 2018. This year, with the current global situation, GDP growth is expected to slow down.

The main sectors identified as being at risk are tourism, automotive and agriculture. According to data from the Central Bank, tourism contributed $15 billion to Morocco's GDP, which was $119 billion, last year. Fitch estimates that a 50% reduction in tourism revenues will affect several small and medium-sized enterprises that depend on tourism and are clients of banks.

At the end of 2019, outstanding loans granted by banks to the economy reached MAD 916.6 billion. The shares served to the agriculture and fisheries sector was MAD 38.4 billion, or slightly more than 4.1% of total credits, while tourism received just about 2% of total loans. But the challenge is that many people and businesses operating in these sectors have received credit.

For example, outstanding loans to the automotive sector are not known, but it now contributes 30% of GDP and is the largest source of foreign exchange in Morocco. If the situation in its main market, Europe, does not improve, this could have important consequences on several areas of activity in the country.

Idriss Linge