South Africa’s trade balance shifted further into deficit in June, recording a shortfall of R5,31-billion and keeping pressure on South Africa’s current account, official data showed on Tuesday.
The data follows May’s smaller R2,67-billion shortfall and compares with expectations of a R3,5-billion gap.
It knocked hopes of a sharp improvement in the current account, which narrowed only slightly to 7% of gross domestic product deficit in the first quarter of 2007.
The South African Revenue Service (Sars) said exports declined by 2,71% from the previous month, while imports increased 3,09%.
Analysts said the the data showed there had been little improvement in South Africa’s trade fundamentals, and that the account would continue to weigh on the currency.
”The number clearly suggests that we are not making any progress in terms of the deficit. Looking at the first six months of the year, we are slightly up [in deficit] on the first six months of last year,” said Dave Mohr, economist at Citadel.
”I think that must always put potential downward pressure on the currency particularly in an environment today where risky assets internationally are losing their appeal and the rand falls within that category.”
The rand initially weakened to 7,11 to the dollar before returning to 7,0950, near levels before the data was released.
Sars said the cumulative trade deficit for the first six months of the year was R29,81-billion compared to R28,3-billion during the same period last year. – Reuters