Morocco’s trade deficit showed significant improvement in the first half of 2024, increasing by just 0.4% compared to 6.8% during the same period last year.
The positive momentum in Morocco’s trade balance is mainly driven by robust export growth, according to a new report from the Office d’Echange (OE), the country’s foreign trade watchdog.
The trade deficit occurs when a country’s imports of goods and services exceed its exports over a certain period. Countries typically aim to reduce their reliance on foreign currency reserves to cover such deficits.
By the end of June 2024, exports had reached MAD 365.8 billion ($34 billion), marking a 3% increase from the previous year. In contrast, imports rose by 2% year-on-year to MAD 7.3 billion ($742.8 million).
Following a period of near-stagnation in 2023, exports are forecasted to achieve an annual growth rate of 4.4% by the end of 2024 and nearly 9% in 2025, according to projections from Bank Al-Maghrib (BAM), Morocco’s central bank.
This positive momentum is largely attributed to the expansion of Morocco’s automotive and fertilizer industries. These sectors are expected to export goods worth MAD 185.1 billion ($18.5 billion) and MAD 88.5 billion ($8.8 billion), respectively, in 2025.
Exports remain an important source of foreign currency for Morocco, along with tourism, remittances, and Foreign Direct Investments (FDIs).
In tandem with export growth, tourism revenues, and remittances are anticipated to maintain their strong performance.
BAM forecasts suggest that tourism revenues will reach MAD 117.2 billion ($11.7 billion) in 2025, representing a 5.8% year-over-year increase.
Likewise, remittances are projected to hit a record MAD 123.7 billion ($12.3 billion) in 2025, reflecting a 5.3% annual rise.
FDIs are also poised for growth, bolstered by favorable economic conditions. After dipping to 2.4% of GDP in 2023, FDIs are projected to stabilize at nearly 3.1% of Gross Domestic Product (GDP) in both 2024 and 2025.
In addition, official reserve assets are set to continue their upward trend, reaching MAD 382 billion ($38.2 billion) by the end of 2024 and MAD 395.6 billion ($39.6 billion) by 2025.
The reserves are expected to cover five and a half months’ worth of imports of goods and services by the end of 2025.