South Africa recorded a deficit of R3,243-billion for its trade with non-Southern African Customs Union trading partners in August after a R1,017-billion deficit in July, according to the latest Customs and Excise figures released on Friday.
The trade balance was expected to remain at a R1-billion deficit in August following July’s R1-billion rand deficit and a surprise R1,335-billion surplus in June, according to a survey of economists.
The range was from a R2,5-billion deficit to a R2-billion surplus. In August last year, there was a R3,131-billion deficit.
Commented George Glynos, market analyst at Econometrix Treasury Management: “It’s not a great number at all and there are no massive imports to account for it either.
“I did notice that importation of oil did push it up by R1,5-billion, which is quite significant, but even so it is not a particularly good number. It keeps the current account under quite significant pressure and renders the rand vulnerable to any change in offshore sentiment towards it.
Mike Schussler, economist at T-Sec, said: “This is a huge deficit. Looking at the picture so far this year, we have been lucky. Oil prices have probably played a huge role in this deficit, but most people will be looking at the next few months to see what happens, because trade figures are generally volatile.
“But this figure is likely to have an impact on the rand and the bond market.”
Dawie Roodt, chief economist at the Efficient Group, commented: “It is more or less what we expected, although it is a bit of a bad number. Although it could react because it did not expect this, I think the market will probably ignore it because it is a very volatile number. I still think the current account deficit to GDP [gross domestic product] could be below last year’s.”
The numbers are worse than expected, said Ridle Markus, senior economist at Absa.
“The exports have been put under pressure in August due to the firmer rand, which reduced export competitiveness. Going ahead, we expect our competitiveness to continue to stay under pressure in the near future if the rand keeps firming,” said Markus. — I-Net Bridge