Morocco’s trade deficit projected to reach 20% of GDP by 2026

Morocco’s trade deficit continues to grow as projections see figures uptick in the next two years, an imbalance between internal demand and slow growth in exports possibly to blame, according to Morocco World News reported on July 15th.

The trade deficit stood at 19.1% of GDP in 2024 and is set to reach 19.8% in 2025. The trend is then assumed to continue, extending to 20.1% in 2026. Although not yet an indication of crisis, the pattern is said to reveal a growing strain caused by increased demand in Morocco’s domestic economy and the deceleration of exports.

The slowdown in exports is reportedly due to a number of factors, including a reduction in demand, especially from Europe, in some of Morocco’s key export industries, such as textiles and automotives. Despite this, Morocco still holds strong trade relations with Spain, Morocco standing as their 3rd largest non-EU trade partner, as reported by Maghrebi.

The pressure on the vehicle sector is largely due to Europe’s move away from combustion-engine vehicles, although, according to the news source, Morocco is pivoting towards EV production, which should allow it to adjust accordingly to the shift in demand.

As for the exceeding import rates, the High Commission for Planning (HCP) expects the imports of goods to increase by 8.8% in 2025 and an additional 7.9% in 2026, with livestock imports accounting for a significant proportion of the rise.

Morocco’s Agriculture Minister revealed, earlier this year, that livestock numbers have decreased by 38% since 2016, largely due to drought. This has led to Morocco becoming dependant on imports to subsidise the shortfall, especially from countries such as Australia, from which they were said to be considering an import deal of 100,000 sheep annually.

Overall, the value of export goods and services could potentially rise by 6.7% in 2025, which leaves the concerning disparity compared to the projected 8.5% growth of imports. The resulting net negative in national growth presents an issue to Morocco, but generally resolvable components, the next two years could offer time for Morocco to recalibrate.

Morocco World News, Maghrebi