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Join on Telegram Rabat – The upward trend in Morocco’s trade deficit is showing no signs of slowing down, reaching 56% at the end of October, continuing to weigh down on the country’s foreign currency reserves.
A country’s trade deficit or trade balance tracks the difference between the monetary value of imports and exports. Countries strive to make their trade balance as neutral as possible because a trade deficit means that the government has to resort to foreign currency reserves to make up for the imbalance, which affects its ability to cushion other macroeconomic shocks.
The recent surge in the cost of imports can be directly attributed to rising energy and food prices as well as a consolidating dollar.
Over the first ten months of 2022, the value of the country’s imports rose to MAD 615 billion ($58 billion), up from MAD 426 billion ($ 40 billion) last year, a 44% increase in value according to recent data from Morocco’s foreign trade watchdog, Office d’Echange (OE).
The growth in the cost of imports significantly outpaced the 36% growth in exports, contributing to the widening of Morocco’s trade deficit.
The value of exports totaled MAD 354 billion ($33.4 billion) at the end of October 2022, up from MAD 259 billion ($24.2 billion) the previous year.
While the volume of Morocco’s energy imports remained largely stable, growing from 5.6 billion tonnes in October 2021 to 6.2 billion tonnes a year later, the monetary value of imports more than doubled, going from MAD 59 billion ($5.5 billion) in 2021 to MAD 128 billion ($12 billion) a year later.
The prices of imported food commodities have also surged year on year. OE data suggests that the value of food imports went from MAD 73 billion ($6.8 billion) for all of 2021, while at the end of October 2022 Morocco already imported MAD 47 billion ($4.4 billion) worth of food products.
Read Also: Morocco’s Trade Deficit Surges to 56% Amid Rising Energy, Wheat Prices
