Political and social risks to curb reforms, fiscal consolidation in Levant and North Africa: Moody’s

Mohamed Samir
1 Min Read

Political and social tensions will slow the pace of reform and limit the scope of fiscal consolidation, Moody’s Investors Service said in a Wednesday report.

Accordingly, the agency forecasted a negative outlook on Levantine and North African countries in 2020.

“Siseable deficits, high debt burdens, external and liquidity risks will continue to constrain sovereign creditworthiness in the Levant and North Africa in the coming year,” said Elisa Parisi-Capone, Moody’s Vice President and the report’s co-author.

Egypt, Morocco, Tunisia, and Jordan in particular are vulnerable to weak global growth, which will exacerbate subdued domestic demand and reduce the benefits of state reforms meant to boost competitiveness, according to the report.

Furthermore, continued weak growth and employment prospects after years of fiscal and economic adjustment are fuelling political and social discontent, particularly in Lebanon and Iraq.

The less predictable global environment could also weaken investor confidence and lead to a shock in borrowing costs, in particular in the event of outright military conflict in the Middle East, which would be particularly credit negative given the region’s reliance on external financing.

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Mohamed Samir Khedr is an economic and political journalist, analyst, and editor specializing in geopolitical conflicts in the Middle East, Africa, and the Eastern Mediterranean. For the past decade, he has covered Egypt's and the MENA region's financial, business, and geopolitical updates. Currently, he is the Executive Editor of the Daily News Egypt, where he leads a team of journalists in producing high-quality, in-depth reporting and analysis on the region's most pressing issues. His work has been featured in leading international publications. Samir is a highly respected expert on the Middle East and Africa, and his insights are regularly sought by policymakers, academics, and business leaders. He is a passionate advocate for independent journalism and a strong believer in the power of storytelling to inform and inspire. Twitter: https://twitter.com/Moh_S_Khedr LinkedIn: https://www.linkedin.com/in/mohamed-samir-khedr/