Attijari anticipates bond rate pressure in second half of 2026
Attijari Global Research AGR forecasts rising bond yields throughout 2026, particularly for medium and long-term maturities, despite a calm second quarter. While improved public finances and external financing by the Treasury offer some market support, factors like rising oil prices, geopolitical tensions, and restrictive international monetary policies reduce visibility for the second half of the year. The budget deficit decreased by nearly 7 billion dirhams year-on-year to 24 billion dirhams by the end of June, representing 43% of the 2026 Finance Law's projection. This improvement is due to a 15.4% increase in ordinary revenues, exceeding the 10.2% rise in overall expenditures, with corporate tax revenues growing by 26.2%. Morocco also successfully raised 2.25 billion euros in international markets in May 2026, signaling investor confidence. Non-fiscal revenues benefited from approximately 10 billion dirhams in innovative financing mobilized in June. The Treasury's financing needs for the first half of the year stood at 23.6 billion dirhams, nearly half of the previous year's 46.1 billion. The gross financing need for the second half is estimated at 82.3 billion dirhams, requiring an average domestic borrowing of 9.6 billion dirhams per month. The Treasury's comfortable cash position, bolstered by over 35 billion dirhams in external drawings, including the Eurobond, should help smooth its market interventions. Gross Treasury borrowings decreased by 8.4% in the first half o