Morocco's trade deficit expands by end: August

Morocco's trade deficit expanded 22.6 percent in the January-August period from a year ago to 122.2 billion dirhams due mainly to higher spending on energy imports, official data showed on Thursday.

A month earlier, the trade deficit rose 21 percent from the January-July period in 2010.

Tourism receipts over the same period rose 6.4 percent to 40.2 billion dirhams and migrant remittances climbed 7.7 percent to 38.8 billion dirhams, data from the Office des Changes foreign exchange regulatory authority showed.

Morocco's currency is not fully convertible and any growth in tourism and remittances helps mitigate any destabilising impact on the banking system from a net outflow of foreign exchange caused by the surge in the trade deficit.

A continuing surge in the trade deficit, analyst say, can deplete the country's foreign currency reserves and complicate its ability to fund its imports under the current currency regime. Foreign currency reserves now cover import needs for six months, one the lowest coverage levels in several years.

Amid political turmoil hitting Arab countries, private foreign loans and investment stood at 16.2 billion dirhams by end-August, down 12 percent from a year earlier.

The trade deficit figure covers only exports and imports of goods and not services. The country of 33 million has no oil or gas of its own and is one of the world's top grain buyers.

Imports rose 20.7 percent to 235 billion dirhams after the energy import bill rose 43 percent to 56.2 billion dirhams and imports of wheat, maize and sugar rose by over 80 percent to a combined 13.5 billion dirhams.

The average prices of crude oil and wheat rose 31 and 62 percent respectively compared with January-August, 2010. Morocco spent 20.4 billion dirhams on 3.3 million tonnes of crude oil and 7.1 billion dirhams on 2.34 million tonnes of wheat.

The state tendered on Thursday to buy almost 550,000 tonnes of soft wheat, after a four-month hiatus to allow farmers to sell their local produce.

Exports of goods rose 19 percent during January-August from a year earlier to 112.8 billion dirhams. Exports of phosphate and its by-products yielded 30.2 billion dirhams by the end of August, 33.8 percent from a year earlier while they were up by an annual 36.7 percent in July and 44.4 percent in June.

Clothing and textile exports rose 7.7 percent to 17.92 billion dirhams, marking a drop from July when they were up by an annual 9 percent.

The dismantling of trade barriers with key trade partner the European Union and with more direct competitors such as Turkey, Tunisia and Egypt has eroded the competitiveness of Moroccan firms which complain of high costs of energy, poor support by the state in promoting Moroccan brands and complex bureaucracy.