JOHANNESBURG: South Africa’s trade balance swung massively to a deficit of R17.87 billion in January from a revised R7.56bn surplus in December, the SA Revenue Service said yesterday.
This was higher than the market consensus of a R14.1bn shortfall. Exports were down by 18.8 percent to R71.5bn on a month-on-month basis, while imports had increased by 11 percent to R89bn on a month-on-month basis. Precious metals and stones, vehicles and transport represented a combined drag of R9.76bn in January, after falling by 36.6 percent month on month and 34.5 percent month on month, respectively. Nedbank said a large trade deficit was usual in January as imports recovered from the slowdown during the December holidays and exports struggled from low production during the festive season.
“The performance of exports during 2016 will remain largely dependent on the recovery of commodity prices as well as the improved competitiveness of manufactured exports, following a significant currency weakness, although softer global demand will constrain growth,” the bank said. Bart Stemmet, an analyst at NKC African Economics, said substantial swings in monthly trade figures were relatively common as the timing of large shipments tended to have a marked effect.
He said South Africa had recorded bloated trade shortfalls in every January for the last five years and thus the swing from December’s surplus to the deep January trough was widely expected. “That said, policymakers will be particularly disappointed that the country’s export revenues dropped as sharply as they did in January, especially in a weak rand environment, where exporters are expected to flourish,” Stemmet said.
