CAPE TOWN: South Africa’s trade deficit widened in August as exports of minerals such as coal and iron-ore declined and oil imports rose.
The trade gap increased to 9.95 billion rand ($720 million) from a revised 1.1 billion rand in July, the Pretoria-based South African Revenue Service said in an e-mailed statement on Wednesday. The median estimate of 14 economists surveyed by Bloomberg was for a shortfall of 3.4 billion rand. The deficit for the first eight months of the year was 36.3 billion rand compared with 69.9 billion rand in 2014.
The deficit on the trade account will keep pressure on the current account, the broadest measure of trade in goods and services, and the rand, which fell to a record against the dollar this week. The current-account shortfall eased to 3.1 percent of gross domestic product in the three months through June, the lowest in almost four years, from 4.7 percent in the previous quarter.
The narrowing of the cumulative trade deficit compared to last year “doesn’t detract from the view of an underlying weak external position,” Manisha Morar, an economist at ETM Analytics, said by phone from Johannesburg. “Our domestic productive capacities are still under strain and exports are under threat amid weakness in the global economy.”
The rand has depreciated 17 percent against the dollar this year. The positive effect of the currency’s decline on export volumes is limited by the slowing global economy, electricity supply constraints and declining tourism receipts, the Reserve Bank said on Sept. 23. The rand gained 0.8 percent to 13.8677 per dollar as of 2:36 p.m. in Johannesburg.
“The rand is still going to remain rather susceptible to shifts in global investor sentiment until we see a more meaningful rebalancing,” Morar said.
Exports declined by 5.9 percent to 87.6 billion rand, led by a 20 percent drop in shipments of minerals products. Imports rose 3.6 percent to 97.6 billion rand as purchases of vehicle and transportation equipment jumped 22 percent and the category that includes oil surged 12 percent.
The monthly trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.
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