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International rating agency Standard & Poor’s(S&P) in early August raised Rabat’s long-term foreign currency rating to BBB from BB+ on the back of an improved external position and the government’s ongoing economic reform efforts. The long-term local currency rating of BBB, short-term foreign currency rating of B and short-term local currency rating of A3 were all affirmed, with a stable outlook. ‘The upgrade is supported by robust external indicators, including high external liquidity and a public sector net external asset position,’ said the S&P report. ‘The ratings are also supported by strong official commitment to economic reform.’ According to the report, the kingdom’s rating is restricted by a high debt burden, a narrow economic base and low per capita income. The budget deficit is expected to increase to 3 per cent of gross domestic product (GDP) in 2005, from 2 per cent last year.