Morocco's Trade Deficit Narrows as Import Costs Drop

Morocco's persistent trade deficit is showing signs of improvement as the cost of imports declines while exports continue to rise. According to the latest figures from the Office d'Exchange (OE), the trade imbalance contracted by 14% in March 2024, with import costs falling by 4% year-over-year and export earnings increasing by 3%.

These figures indicate a positive shift in Morocco's external trade dynamics, with import expenses decreasing significantly. During the first quarter of 2024, total imports were valued at MAD 175.4 billion ($17.4 billion), down from MAD 182.7 billion ($18.1 billion) in the same period in 2023.

The decline in import costs is largely due to reductions in energy, raw materials, and food imports. The country's energy import costs, which had previously posed a significant burden, fell by 13% year-over-year to MAD 28 billion ($2.7 billion) by the end of March 2024. This drop occurred despite a slight 0.7% increase in energy import volume, indicating that the 33% fall in global energy prices played a significant role in this reduction.

A similar trend was observed in raw material imports, with costs dropping by 22% annually to MAD 7.1 billion ($705 million). Food imports also saw a 7.7% year-over-year decline, totaling MAD 21.8 billion ($2 billion).

On the export side, Morocco continues to see growth, further strengthening its trade position. Total exports reached MAD 113.5 billion ($11.2 billion), a 3% increase compared to the previous year. Leading this growth is the automotive industry, which experienced a 13% year-over-year increase in export earnings, reaching MAD 38 billion ($3.7 billion) by the end of the first quarter.

The aeronautics industry also contributed to Morocco's export growth, with a 13% increase in export value, totaling MAD 6 billion ($596 million). However, the phosphate, textile, and agribusiness sectors saw declines in export earnings, with year-over-year drops of 2.3%, 3.7%, and 3%, respectively.

As Morocco's trade dynamics continue to evolve, its efforts to diversify its export base and reduce import costs appear to be paying off. This trend not only strengthens the country's external trade position but also enhances its economic resilience in an increasingly complex global landscape.