CAPE TOWN: South Africa recorded a bigger-than-expected trade balance in December from the previous month, but a sharp decline in exports of manufactured goods revealed the persistence of weak economic activity. Expectations of increased exports by Africa’s most industrialised economy as a result of a weaker rand that fell more than 40 percent to the dollar last year had failed to materialise.
The trade balance stood at a surplus of 8.22 billion rand ($511 million) in December from a revised 682 million rand surplus in November, the national revenue agency said on Friday, attributing the increase to a sharp, seasonal fall in imports.
The consensus for the surplus was 4.85 billion rand. Imports fell 13.3 percent to 80.55 billion rand on a month-on-month basis while exports also fell, down by 5.1 percent to 88.77 billion rand, the South African Revenue Service said. On an annual basis, South Africa recorded a 48.63 billion rand trade deficit compared with a shortfall of 82.27 billion in 2014, the data showed.
The country recorded a large deficit in October, of 21.39 billion rand, but has eked out a surplus in the last two months, a trend that analysts said would continue if the country was able to take advantage of the fall in the currency and the weak economy led to further decreases in imports.
Exports in vehicles and transport equipment were the biggest decliners, down by 28 percent in the period, followed by a 14 percent decline in exports of machinery and electronics, a sign of the economy’s enduring weakness, analysts said.
“What is a concern that we are still not seeing significant traction in the export market,” said chief economist at Stanlib Kevin Lings. “If you look at the breakdown, it is a more of a decline in exports of our manufactured goods, so you can’t say that this a commodity story,” Lings said, referring to the global slowdown in demand for South African commodities as the economy of major resources consumer China cooled.
