Morocco’s Trade Deficit Narrows Amid Slowing Economic Growth

The figures published by the Foreign Exchange Office on foreign trade at the end of March 2019 in Morocco show an improvement due to a larger increase in exports (+2.9 billion dirhams) than in imports (1.8 billion dirhams). This situation is due to "Morocco’s trade deficit vis-à-vis the rest of the world, which has been reduced by 1.1 billion dirhams to stand at 46.9 billion dirhams".

However, there is no need to rejoice despite this good news. Indeed, "the weak evolution of trade reflects a slowdown in economic activity." In reality, Média24 points out, "exports only grew by 4.1%, to 74.3 billion dirhams compared to the same period last year, while growth rates were approaching or even exceeding 10%." As for agricultural exports, they recorded a small increase of 3.2%, the automotive industry +1.6%, textiles +1.7%. Only phosphates showed good performance at 20%, the media specifies.

As for imports, the slowdown is more pronounced (+1.5%, to 121.2 billion dirhams). The reason is that "finished consumer goods, food products and capital goods have stagnated. The energy bill has fallen by 1%. Only semi-finished products have increased by 7.4%," it is detailed. Moreover, it must be noted that travel receipts have stagnated, while travel expenses have increased by 400 million dirhams to reach 4.3 billion dirhams. The same source reports that with regard to financial flows, remittances from Moroccans living abroad have fallen by 900 million dirhams to stand at 15 billion dirhams, while "foreign direct investment (FDI) has fallen by 2.8 billion dirhams, to stand at 3.1 billion".

All this suggests that Bank Al-Maghrib foresees a 4.8% increase in exports and a 2.9% increase in imports in 2019, levels similar to those of the first quarter. For the banking institution, a slowdown in the global economy is foreseeable as well as the demand addressed to Morocco, and therefore a slowdown in imports of capital goods and energy products. All of which leads the central bank to forecast a low economic growth of 2.7%.