Casablanca – The Moroccan trade deficit has deepened significantly at the start of 2025, with a 13.3% increase compared to the same period last year, reaching a total of $2.52 billion by the end of January. This surge in the trade gap is primarily attributed to a combination of rising imports and declining exports, as reported by the Office des Changes in its latest monthly foreign trade indicators.

The Office’s report highlights that Morocco’s imports increased by 3.4%, totaling $6.17 billion at the end of January 2025, compared to the same month in 2024. Meanwhile, the country’s exports saw a 2.4% decrease, amounting to $3.64 billion. This combination of increased imports and declining exports has contributed to the widening trade deficit. As a result, the coverage rate, which measures the proportion of imports covered by export revenues, has fallen to 59.1%, down from 62.6% a year earlier, marking a drop of 3.5 percentage points.

Import growth driven by multiple sectors

The rise in imports was driven by increases across several key categories of goods. The most significant rise was seen in raw materials, which increased by 17.8% to reach $305 million. This surge reflects a higher demand for primary commodities used in domestic production. Manufactured capital goods also saw a notable increase of 10.8%, totaling $1.46 billion, as Morocco continues to invest in infrastructure and industrial development.

Another significant increase was observed in the import of consumer goods, which rose by 6.4% to $1.32 billion. This category includes products such as textiles, electronics, and household items, which are essential to meet domestic demand. The import of food products also grew by 3.1%, reaching $846 million. This growth was driven by higher demand for staple foods, including corn, oilseeds, and live animals, amid rising global food prices and supply chain challenges.

Additionally, semi-finished products, which totaled $1.34 billion, saw a 1.7% increase. This category includes essential components such as parts for machinery and vehicles, indicating robust industrial activity in Morocco. However, the energy bill was one of the few areas to show a decline, with energy imports dropping by 11.6% to $880 million. This drop can be attributed to more stable global energy prices, which helped ease some of the pressure on Morocco’s import expenses.

Export performance and sectoral variations

While Morocco’s overall exports faced a decline, certain sectors continued to show resilience. Aerospace exports, in particular, performed strongly, rising by 14.2% to nearly $230 million. This performance reflects Morocco’s growing position as a hub for aerospace manufacturing, particularly in the assembly of parts and electrical wiring systems.

The textile and leather sector also showed positive growth, with exports increasing by 5% to $387 million. The growth in this sector was mainly driven by an uptick in the export of finished garments, as well as leather products, which continue to find demand in European and global markets.

Another notable performer was mineral extractions, which saw a 21.2% increase to $42 million. This growth was primarily due to the strong performance of non-phosphate mineral products, which have seen rising global demand.

However, other major export sectors faced significant declines. The automotive sector, despite its position as Morocco’s top export earner, experienced a 10.9% drop in sales abroad, totaling $1.06 billion. This decline is partly linked to weaker demand in key export markets such as Europe and disruptions in global supply chains.

The agriculture and agri-food sector also faced challenges, with exports declining by 2.3% to $896 million. The decline was primarily driven by lower sales in the construction and outdoor product segments, although this was partially offset by increased exports of electrical cables.

Exports of phosphates and derivatives saw a substantial decline of 10.7%, falling to $581 million. This drop is attributed to weaker global prices for phosphate-based products, including raw phosphates and fertilizers, which form a major part of Morocco’s export portfolio.

The electronics and electrical sector also faced a contraction of 9.1%, with exports totaling $146 million. This decline was primarily due to lower exports of electronic components, despite an increase in the export of wires, cables, and other electrical conductors.

MRE transfers show modest increase

Despite the challenges in Morocco’s trade balance, the financial inflows from the Moroccan diaspora (MRE) remained a bright spot in the country’s economic outlook. By the end of January 2025, transfers sent by Moroccans living abroad exceeded $975 million, marking a modest 0.5% increase compared to the same period in 2024. This represents an additional $4.5 million in remittances compared to the previous year.

The steady flow of remittances plays a critical role in supporting Morocco’s economy, providing crucial liquidity for many households and boosting domestic consumption. These transfers continue to be one of the largest sources of foreign currency for the country.

Foreign and domestic investments on the rise

Morocco also saw an increase in foreign and domestic investments during the first month of 2025. The net flow of foreign direct investments (FDI) reached more than $333 million, a significant improvement of 16.9% compared to the same period in 2024. The increase was driven by higher income from FDI, which rose by 24.1% to $509 million, and increased expenditure on these investments, which grew by 40.4% to $175 million.

Furthermore, Morocco’s own investments abroad (MDI) saw a positive trend, with a rise of $83.5 million, reaching $74.5 million in net flow, compared to a negative value of -$9.2 million at the end of January 2024. The rise in both receipts and expenditures related to these investments indicates growing international involvement by Moroccan businesses and a broader diversification of investment portfolios.

 Mixed trends in Morocco’s foreign trade and investment landscape

While Morocco’s trade deficit continues to widen due to increased imports and declining exports, positive developments in remittances and foreign investments provide some relief. The growth in transfers from the Moroccan diaspora and the increase in foreign direct investments highlight the ongoing financial support from both abroad and domestic businesses. However, the challenges faced by key export sectors, including automotive, agriculture, and phosphates, underscore the need for Morocco to bolster its industrial and export capabilities, diversify its markets, and improve its competitive edge on the global stage.