OWN CORRESPONDENT, Johannesburg | Tuesday 6.00pm.
SOUTH Africa recorded a R911-million trade surplus in October compared to a R1,37-billion surplus in September, the country’s customs and exise department said on Tuesday.
Analysts forecast a deficit of R700-million.
The cumulative surplus for the first 10 months of the year amounted to R13,09-billion compared with R966-million surplus in the same period a year ago.
“The market must perceive this as a good number but these trade figures are so volatile from month to month. Looking into next year, if the balance of payments stays okay then there is further room for interest rate cuts. But we should expect the current account to deteriorate as imports pick up,” said Johann Els, an economist at Old Mutual Asset Managers.
“This is good news for the current account and is slightly better than I expected. It also shows that the current account does not pose such a big problem for South Africa.
These figures will help the current account deficit to be lower in the fourth quarter than the deficit expected in the third,” said PJL Financial Services economist Dawie Roodt.
Bruce Donald, Economist at Merrill Lunch, said the numbers are encouraging in view of the importance of current account performance for the sustainability of lower interest rates.
“Although the numbers are volatile, at this stage one can see a clear trend emerging and that is that the trade balance may be deteriorating a bit on the back of imports but not as quickly as the market was expecting. The subdued deterioration is good for the overall balance of payments,” said Adenaan Hardien, economist at Velocity Asset Management.