South Africa's trade balance swung to its first monthly surplus in 29 months in May, data showed on Tuesday.
South Africa’s trade balance swung to its first monthly surplus in 29 months in May, data showed on Tuesday, as the prevailing economic recession kept imports depressed.
The South African Revenue Service said the country recorded a surplus of R2-billion in May from a deficit of R1,46-billion in April, the first positive balance since December 2006.
Economists polled by Reuters had predicted a deficit of R2-billion, although the trade number is generally volatile and difficult to forecast.
Compared with the previous month, exports rose by 1,97%, mainly due to vehicles and aircraft, while imports dropped by 6,35% on lower machinery and original equipment.
“It’s good news that we’re back into surplus territory and exports have outpaced imports for once. The rand certainly firmed as a result, which is justifiable,” said George Glynos, an analyst at ETM.
“The big question is whether or not this can be sustained ... Before we get too excited, we should perhaps wait a couple more months for confirmation before we start talking about a significant narrowing in the current-account deficit.”
A deterioration in the trade balance from a near-balance in 2004 has been a key contributor to South Africa’s current-account deficit, which widened to 7% of gross domestic product in the first quarter of 2009, compared with 5,8% in the fourth quarter.—Reuters