Morocco's foreign trade gap narrowed 5.1% y/y to MAD 113.2bn (USD 13.5bn) in January-July 2013 mainly on falling energy and food imports which offset and a mild drop in exports, preliminary data from the Office de Change showed. Exports fell 1.7% y/y to MAD 107.4bn and imports shrank 3.5% to MAD 220.6bn over the period.

Energy purchases declined 9.0% y/y to MAD 57.5bn on favourable seasonal factors and lower oil prices mainly in the first five months of the year. Food imports also fell 7.1% to MAD 22.4bn in January-July. A strong harvest output that boosted mainly grain stocks cut purchases over the period. Declining consumption goods purchases, mainly those of passenger cars (down 13% y/y to MAD 5.3bn) and apparels (down 25% to MAD 946mn) also weighed on imports.

Phosphates and derivatives exports shrank 18% y/y to MAD 23.3bn in January-July on slower EU demand and lower basic commodity prices. Sales of the value-added textile and leather fell 3.8% to MAD 19.6bn. Agriculture-related exports increased 5.4% y/y to MAD 20.3bn over the period given the high local stock.

A recovering services sector, a narrowing trade gap and anticipated foreign grants and soft loans receivables will likely help improve Morocco’s external position by end-2013.

The current account deficit will likely narrow to 7.0% of GDP in 2013 from 9.6% the year before, the IMF said in its April World Economic Outlook.