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Morocco's Trade Deficit Contracts with Rising Export Values and Falling Import Costs
Morocco's trade deficit, a longstanding concern, is displaying promising signs of improvement as the nation experiences a convergence of factors including a decrease in energy and food prices alongside an increase in export values.
According to a recent report from Morocco's Office des Changes, the country's trade deficit diminished by 7.3% on an annual basis, reaching $28.6 billion by the conclusion of 2023. A trade deficit occurs when a nation's imports surpass its export earnings.
This reduction in the deficit can be attributed to a 2.9% decline in import costs coupled with a marginal 0.2% rise in export values. In the previous year, Morocco's import expenditures amounted to $71.5 billion, while exports totaled $42.9 billion.
The report identifies the decrease in import values as stemming from diminished shipments of energy products, industrial goods, and raw materials. Particularly noteworthy is the 20.4% decline in energy imports, driven by a significant drop in fuel and gas oil acquisitions as prices fell by 17.9%, despite a 7.3% decrease in import volumes.
Similarly, purchases of industrial semi-finished products experienced a notable decline of 10.5%, primarily due to a sharp reduction of 58.7% in ammonia acquisitions. Raw material imports also saw a substantial decrease of 28%, primarily due to a 10.7% reduction in raw sulfur acquisitions.
Offsetting these declines, food imports witnessed a slight increase, while shipments of finished consumer products surged by 11.3%. This surge was largely driven by a 27.7% increase in auto part imports and a 15.4% rise in passenger vehicle purchases.
As energy and raw material costs stabilize, Morocco's trade balance seems to be moving in a positive direction. However, the growth in consumer imports could pose challenges if export values fail to keep pace.