OWN CORRESPONDENT, Johannesburg | Thursday 9.20am
RESERVE Bank Governor Tito Mboweni on Wednesday warned the country’s current account has slipped into deficit in the second quarter of the year and could remain in the red for the rest of 1999.
But South Africa’s first black central bank boss said that foreign investment in the country as economic growth picked up should ensure that this funding shortfall will be filled with ease.
”It seems that the current account may remain in deficit for the remainder of the year… The deficit on the current account should be financed comfortably by net capital inflows,” Mboweni told businessmen at a dinner event.
The Reserve Bank last week revealed that the country’s first half current account balance surplus stood at R600-million, compared to a R19,1-billion deficit the year before.
But the data, released in the Bank’s annual report, implied that the second quarter had slipped into deficit after the first quarter’s two billion rand surplus.
Mboweni said that South Africa’s anorexic economy looks poised for growth and that although consumers might buy more imports, pressuring the current account, this ought not be a cause for concern.
He said South Africa’s economy grew by a tiny 0,5% last year and warned a pick-up now will do little to dent mountainous levels of unemployment in a country where a third of the labour force is estimated to lack formal work. — Reuters