Morocco’s Trade Deficit to Show Signs of Recovery in 2023

Rabat – Morocco’s trade deficit is set to shrink slightly next year, going from 4.9% of Gross Domestic Production (GDP) in 2023 to 3.8% the following year, according to the latest Monetary Policy Document from Bank Al-Maghrib (BAM), Morocco’s central bank.

After widening by 2.3% of GDP in 2021 primarily due to a marked rise in the value of imports, the trade deficit is projected to recover in 2023 as commodities prices stabilize in the international market, adds the document.

In 2023, exports should increase by 0.8%, reflecting a positive growth in Morocco’s automotive sector. Over the same year, imports are set to increase by 0.3% as the country’s energy bill stabilizes, says the BAM document.

Morocco’s tourism sector is meanwhile set to generate MAD 70.9 billion ($7 billion) in revenues, while remittances from Moroccans abroad should reach MAD 84 billion ($8.4 billion).

BAM also forecasts that, due to Morocco’s rising phosphate and automotive exports, the country’s overall export figures will increase by 22% by the end of this year.

The document further projects that Morocco’s imports would increase by 24.2% due to significant growth in domestic demand for semi-finished products and raw materials, as well as the rise in the energy and grain bills.

With Morocco’s reopening of its borders to international travel last February, the country’s tourism revenues are set to increase by 58% to reach MAD 54.3 billion ($5.4 billion) by the end of this year.

In the meantime, also by the end of the year, remittances from Moroccans abroad should decline by 6.8% to an average of MAD 87.3 billion ($8.7 billion).

Echoing the trend of the trade deficit, Morocco’s overall economic growth is set to accelerate to 4% in 2023, reflecting a strong 12.9% recovery in agriculture activities. At the same time, non-agriculture activities are set to grow at a slower rate of 2.8% due to the stagnating international demand for locally produced commodities.