The rise reflects the fact that the monetary value of the country’s imports is disproportionately higher than its exports.
Rabat – Morocco’s trade deficit soared by nearly 57% at the end of November 2022, triggered by the lingering price shock within the energy and food markets.
Trade deficit, which reflects a country’s ability to continue importing products it needs without draining its foreign currency reserves, has been climbing to record heights in Morocco throughout this year.
The rise trade deficit reflects the fact that the monetary value of the country’s imports is disproportionately higher than its exports, meaning that the country has to resort to foreign currency reserves to cover the deficit.
Over the first eleven months of 2022, imports reached MAD 677 billion ($64.8), a 42% increase from last year’s MAD 475 billion ($45.5 billion).
On the other hand, exports rose by 33%, going from MAD 292 billion ($30 billion) in November 2021 to MAD 390 billion ($37 billion) a year later, according to data from the Exchange Office (OE), the country’s foreign trade watchdog.
The imbalance in the monetary value between imports and exports is mainly due to skyrocketing prices of food and energy commodities. The severe drought that had crippled Morocco’s rainfall-dependent agriculture increased the country’s reliance on food imports and pushed the trade deficit even higher.
At the end of November, Morocco’s imports of wheat — a staple in the national diet — almost doubled, reaching a staggering MAD 24 billion ($2.2 billion). Likewise, the monetary value of energy imports rose to MAD 141 billion ($13 billion), up from MAD 67 billion ($6.4 billion) at the end of November 2021, OE data suggests.
Earlier this month, Morocco’s central bank, Bank Al-Maghrib said that the stalemate in the Ukraine war is casting doubt on the prospects of price recovery in the food and commodities market. The Moroccan central bank is not alone in taking this view.
The International Monetary Fund (IMF) maintains that despite retearing from the April highs, the food and energy market remains cloaked in uncertainty and could spiral down anew.