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Join on Telegram Rabat – After reaching record-high levels in 2022, Morocco’s trade deficit is set to ease in 2023, according to a new publication from the High Commission of Planning (HCP).
Building on the current prospects of the global economy, HCP predicts that Morocco’s trade balance would drop to an average of -20% of GDP in 2023, down from the staggering -22% of GDP it averaged in 2022.
A budget deficit reflects the monetary value between a country’s imports and exports. A higher value of imports means that countries should resort to their reserves of foreign currency to cover the deficit, which affects critical state reserves.
In 2022, Morocco’s trade deficit skyrocketed which was triggered by multiple factors. As global economic recovery was severely disrupted by the Ukraine war, energy prices reached historical levels, pushing the value of Moroccan imports higher as the country imports 90% of its energy needs.
Adding to higher energy prices, the suboptimal agriculture season on the backdrop of drought and its impact on the harvest forced the country to boost its grain imports, tipping the trade balance further. The consolidation of the dollar equally pushed the value of imports higher, further draining Morocco’s foreign currency reserves.
Noting other macroeconomic trends, HCP predicts that inflationary pressures in Morocco would equally ease in 2023, with inflation set to average at 1.9%, against a staggering 5% from 2022.
Price shocks are set to ease in 2023, the HCP report argues based on converging data from the Internation Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD). However, global economic growth remains cloaked with uncertainty.
Global economic growth is set to drop to 1.7% in 2023, down from 2.9% in 2022, and 5.9% in 2021, the same report indicates.
Read Also: Morocco’s Trade Deficit Soars By 57% Amid Lingering Energy, Food Price Shock
