Morocco’s foreign trade deficit expanded 7.7% y/y to MAD67.4bn in the first five months of the year on stronger growth of imports that mitigated rising exports, preliminary data from the Office de Change showed.
Imports were supported by strong economic activity, private consumption and industrial demand.
Total imports (CIF) rose 4.3% y/y to MAD163.35bn in January-May lifted by increasing purchases of equipment (up 20% y/y), end consuming goods (up 16.4% y/y), semi-finished goods (up 9%) and food imports (up 11% y/y).
In 2016, Morocco expects the agro output to decline and thus food imports to expand.
Exports (FOB) increased just 2.0% y/y to MAD96bn in January-May amid subdued EU demand for Morocco’s value-added products. GDP growth is expected to decelerate in 2016 to 2.3% due to the drought in the winter that cut agricultural output. Sluggish growth in Europe – Morocco’s main trade partner – and continued modest non-agricultural growth will also dampen the economic expansion, according to the EBRD.
Passenger cars exports climbed 15% y/y while those of agro items rose 4% y/y at end-May. Phosphates sales, however, remained in the red falling 11% y/y to MAD16.1bn.
As to Morocco’s tourism income, it rose 6.6% y/y to MAD21.5bn in January-May in good news for the country‘s services sector and related contribution to the current account balance. The country is also benefiting from the tourism outflow from neighbouring Tunisia. Net transfers from Moroccans working and residing abroad also increased 4.1% y/y at MAD24.3bn in January-May. The EU-based diaspora remains the key source of remittances. As to net FDI, it fell 23% y/y to MAD9.6bn in January-May.
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