LUCIA MUTIKANI Pretoria | Friday
SOUTH Africa’s trade surplus widened in the first four months of the year on strong base metals exports, boosting prospects of a current account surplus in the second quarter of this year, figures showed on Thursday.
The South African Revenue Services (SARS) said the country recorded a trade surplus of R4.25bn in April compared to a R3.78bn surplus in March.
A Reuters consensus poll of economists had forecast the trade balance would show a R2.3bn surplus.
April’s figures brought the cumulative surplus for the first four months of the year to R14.07bn compared with R7.89bn in the same period a year ago.
However, SARS said the monthly figures for April included R2.3bn worth of exports which should have been included in March’s data.
South Africa’s trade statistics are highly volatile, and an inclusion of data not recorded in a previous month happens occasionally. Economists said they would stick to the official data – and the key was really the cumulative figure.
”That’s a brilliant figure. I think we are heading for a surplus on the current account not only in quarter one (but also) quarter two and very likely for the whole year,” said Mike Schussler, economist at Tradek.Com.
”It is good for interest rates, the rand and for overall South African economic performance.”
South Africa’s current account moved into a R2.5bn surplus in the fourth quarter of 2000, shrinking the deficit for the whole year to R3.1bn. Current account figures for the first quarter of 2001 will be released in June.
”The likelihood of a current account surplus will help to add some fundamental support for the rand,” said Absa Treasury economist Chris Hart.
But the data did not support the rand, which slipped to 8.04 against the dollar, driven mainly by the euro’s drop below the $0.85 resistance level. The euro is the currency of South Africa’s major trading partner.
The rand has depreciated about 4.3% against the dollar so far this year.
Despite the better-than-expected trade surplus, April exports declined 3.34% from March, suggesting that the global slowdown was starting to have some impact. Diamond and gold exports decreased by R915m in April.
Imports declined 6.9%, confirming that domestic demand had slowed.
”Looking ahead, we judge that the risks for the trade balance continue to lie on the downside. Despite rising gold and platinum prices, the global slowdown could well begin to impact on manufacturing exports at some point,” said Alan Castle, an economist at Lehman Brothers. – Reuters