Despite the fall in Morocco’s trade deficit, outflows increased by only 4.1% at the end of March and imports by 1.5%, indicating a weakening of economic activity.
According to foreign trade statistics at the end of March 2019, published by the Office des Changes, Morocco’s trade deficit with the rest of the world has decreased from 1.1 billion DH to 46.9 billion DH.
This increase is the result of a stronger increase in exports (+2.9 billion DH) than imports (1.8 billion DH). Unfortunately, however, the weak development of trade reflects a slowdown in economic activity.
Certainly, exports only increased by 4.1%, to 74.3 billion DH compared to last year, while the growth rates were close to, or even higher than, 10%.
Agricultural exports recorded a slight increase of 3.2%, automotive +1.6%, textiles +1.7%. Phosphates are the only ones with an excellent performance of 20%.
On the import side, the slowdown is stronger +1.5%, at 121.2 billion DH. Finished consumer products, food products and capital goods have stagnated. The energy bill has been reduced by 1%. Only semi-finished products increased by 7.4%.
The services balance situation is also improving, but this is due to a more pronounced decline in imports than exports.
Essentially, travel revenues stagnated while travel expenses increased by 400 MDH to reach 4.3 billion DH.
As for financial flows, MRE transfers decreased by MAD900 million to MAD15 billion.
Foreign direct investment (FDI) flows decreased from DH 2.8 billion to DH 3.1 billion.
The turn of events could change in the coming months in both directions. Not to mention that Bank Al-Maghrib forecasts a 4.8% increase in exports and 2.9% in imports in 2019, similar to the first quarter.
BAM expects a weakening of the global economy and therefore of demand for Morocco, as well as a decline in imports of capital goods and energy products.
Overall, the Central Bank estimates that economic growth will be slow (2.7%) and that the external accounts balance will show a deficit of 4% of GDP.