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27 Feb 2009 14:42
South Africa’s trade deficit hit a record R17,4-billion in January, swelled by plunging vehicle and precious metal exports as a global economic crisis hits demand.
The South African Revenue Service (Sars) said on Friday the trade gap widened from R1,64-billion in December and R10,2-billion in the same month last year.
Economists had predicted a R6-billion gap, although the number is traditionally volatile and difficult to predict.
The deficit will keep pressure on the country’s ailing current account—a thorn in the economy’s side for several years—and the rand currency.
The shortfall on the current account stood at 7,9% of GDP in the third quarter of 2008.
“An absolutely shocking trade deficit in January ... little doubt that this print is rand negative, but for markets, the immediate question will be whether this sort of trade performance will be sustained in the months to come,” Razia Khan, regional head of research for Africa at Standard Chartered in London, said.
“All the signs are that there will be even worse news yet to come.”
Sars said exports fell by 25,32% compared with December, mainly due to a sharp fall in exports of vehicles and precious metals.
Vehicle exports dived 52%, precious metals and stones fell 31% and machinery shipments were down 38%.
South African manufacturers are feeling the brunt of the impact from a global economic downturn and recession in major trading partners, with output contracting by a near 50-year record of 21,8% in the fourth quarter.
The motor industry has been particularly hard hit, with domestic new vehicle sales falling an average of about 30% over the past six months.
The manufacturing woes helped drag economic growth down 1,8% for the quarter and set Africa’s biggest economy on the path to its first recession in 17 years.
Imports were up 6,88% month-on-month, Sars said.—Reuters
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