South Africa’s current account deficit widened more than expected
in the third quarter, as the value and volume of exports fell amid
weaker output data from the productive sectors of the economy.
The surplus on the trade account in the second quarter — when gross domestic product (GDP) growth also lifted to a surprise 3.5% — swung to a small deficit in the third quarter, which led the current account deficit to expand to 4.1% of GDP, the Reserve Bank said on Friday.
That is up one percentage point from a deficit of 3.1% in the second quarter, and compares with economists’ forecasts of between 3.3% and 4% of GDP.
The deficit widened to R176bn in the third quarter from R123bn in the second quarter.
The Reserve Bank said factors contributing to the widening deficit included weaker international demand for domestically produced goods; some strengthening in the exchange value of the rand, which more than offset the benefit from higher international commodity prices; and weaker demand for imports.
After rising 1.3% in the second quarter, the value of merchandise imports fell 3.2% in the third quarter, to R1.083-trillion from R1.119-trillion. The volume of merchandise imports eased for a third quarter, falling 1.9%.
The value of merchandise exports declined by 7.2% during the third quarter of 2016, to R1.033-trillion in the third quarter from R1.112-trillion, due to falls in the export value of mining products, especially of base metals, although the value of iron ore products grew during the third quarter. The decline followed a rise of 10.6% in the second quarter.
The value of manufactured products had risen for five successive quarter previously but overall contracted by 6.3% in the third quarter of 2016, on falls in vehicle and transport equipment, machinery and electrical equipment and prepared foodstuff.
The export of vehicle and transport equipment is significant, and during the quarter not even the export of 15 locally manufactured railway coaches to a neighbouring country was sufficient to offset the drop in the total value of exported vehicles and transport equipment.
The coaches were the last to be dispatched from a total order of 37 coaches.
At SA’s ports, the volume of exported bulk and break bulk cargo handled at national ports shrank by 9% between the second and third quarters.
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The surplus on the trade account in the second quarter — when gross domestic product (GDP) growth also lifted to a surprise 3.5% — swung to a small deficit in the third quarter, which led the current account deficit to expand to 4.1% of GDP, the Reserve Bank said on Friday.
That is up one percentage point from a deficit of 3.1% in the second quarter, and compares with economists’ forecasts of between 3.3% and 4% of GDP.
The deficit widened to R176bn in the third quarter from R123bn in the second quarter.
The Reserve Bank said factors contributing to the widening deficit included weaker international demand for domestically produced goods; some strengthening in the exchange value of the rand, which more than offset the benefit from higher international commodity prices; and weaker demand for imports.
After rising 1.3% in the second quarter, the value of merchandise imports fell 3.2% in the third quarter, to R1.083-trillion from R1.119-trillion. The volume of merchandise imports eased for a third quarter, falling 1.9%.
The value of merchandise exports declined by 7.2% during the third quarter of 2016, to R1.033-trillion in the third quarter from R1.112-trillion, due to falls in the export value of mining products, especially of base metals, although the value of iron ore products grew during the third quarter. The decline followed a rise of 10.6% in the second quarter.
The value of manufactured products had risen for five successive quarter previously but overall contracted by 6.3% in the third quarter of 2016, on falls in vehicle and transport equipment, machinery and electrical equipment and prepared foodstuff.
The export of vehicle and transport equipment is significant, and during the quarter not even the export of 15 locally manufactured railway coaches to a neighbouring country was sufficient to offset the drop in the total value of exported vehicles and transport equipment.
The coaches were the last to be dispatched from a total order of 37 coaches.
At SA’s ports, the volume of exported bulk and break bulk cargo handled at national ports shrank by 9% between the second and third quarters.
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