South Africa recorded a deficit of R2,418-billion for its trade with non-Southern African Customs Union trading partners in April after a deficit of R2,877-billion in March, according to the latest Customs and Excise figures released on Wednesday.
The deficit was expected to narrow to R2-billion, a survey of economists by I-Net Bridge found. Forecasts ranged from a R100-million deficit to a R3,1-billion deficit.
For the whole of 2005, South Africa recorded a trade deficit of R21,775-billion after a R12,667-billion deficit in 2004.
Magan Mistry, economist at Nedbank, commented: “The deficit has narrowed from the previous month but still remains large. Cumulative import growth remains well ahead of export growth.
“It is the fourth consecutive month of deficit and will result in a larger current account deficit this year, which is one of the factors cited by the monetary policy committee as an inflation risk. The risk to inflation increases, but we expect interest rates to remain unchanged.”
Said Ridle Markus, economist at Absa: “The figure was slightly above expectations but not surprising. But what is very worrying is the R17-billion accumulated deficit for the first four months — that will put pressure on the current account. And the rand could be negatively impacted.”
Mike Schussler, economist at T-Sec, commented: “It’s a bit higher than I expected but it’s not as bad as the beginning of the year. I think that the gap will close over time what with the higher commodity prices.”
The April trade deficit was wider than expected due to the higher oil price, the strength in the rand and strong consumer demand, said George Glynos, ETM market analyst. “This keeps the trade deficit wide and the current-account deficit at 4% of gross domestic product. This renders the rand more vulnerable to volatility. The trade figure also shows that the structural imbalances in the South African economy imbalance are alive and well.” — I-Net Bridge