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Low oil prices will benefit Morocco

Monday, March 9, 2015

Significance

Boussaid explained that preliminary figures suggest that growth stood at 3% last year, while the trade balance deficit shrank by 6%. Newly developed export lines, in particular cars manufactured at a plant set up by Renault-Nissan to the east of Tangiers, are contributing to the improved trade balance. This has resulted in a more diversified export slate, which has reduced the country's reliance on phosphate sales. Morocco's external accounts are also benefiting hugely from the fall in oil prices, as the country is heavily dependent on imported energy.

Impacts

  • The diversification of exports has lessened dependence on phosphates and agriculture, sectors that are both vulnerable to cyclical swings.
  • Morocco's largest market is the EU, with which it has an economic association agreement.
  • Yet it is also developing trade with its West African neighbours, and has a free-trade agreement with the United States.
  • The growth of the car industry has created job opportunities in the deprived north, which has been a recruiting ground for jihadi groups.
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