Macroeconomic Forecast Morocco

We forecast Morocco's fiscal deficit to widen to 8.3% of GDP in 2011, compared to our previous forecast of 7.7%. The country's lack of oil revenues, along with efforts by Rabat to mitigate social unrest (which could raise spending), are primary factors underpinning our view. That said, rumours about a potential extension of the Gulf Cooperation Council (GCC) to include Morocco and Jordan raise the possibility that cash inflows in the form of grants from the GCC could boost budget revenues and pose upside risks to our budget forecasts.

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