Johannesburg.- South Africa’s trade balance‚ which now includes trade with Botswana‚ Lesotho‚ Namibia and Swaziland‚ recorded a R11, 389 billion deficit in March after a R647 million (revised from R1,72bn) surplus in February‚ South African Revenue Service customs and excise data showed on Wednesday.
Trade data are important measures of economic performance because they show how much South Africa is selling to and buying from the rest of the world.
The data are also an important leading indicator of how the current account – whose deficit has contributed to rand weakness most of last year – will perform.
The trade balance recorded a R21,16 billion deficit if trade with Botswana‚ Lesotho‚ Namibia and Swaziland was excluded.
A poll of economists surveyed by BDlive had forecast a R1 billion surplus. The forecasts ranged from deficits of R5 billion to a surplus of R2 billion.
The R11,389 billion deficit in March was attributed to exports of R80,26 billion and imports of R91,65 billion.
Exports decreased from February to March by R2,51billion, or 3 percent, while imports rose by R9,52 billion, or 11,6 percent, over the period.
The cumulative deficit for 2014 is R27,69 billion compared to R21,61 billion in 2013.
Commenting on the trade data, ETM Analytics economist Jana van Deventer said: “It is very disappointing. It demonstrates how the strike activity in the platinum mining sector is impacting on South Africa’s terms of trade and what is concerning is that the cumulative deficit has now widened relative to 2013.
This poses medium-term risks to production given that the strike action is still on-going.”
“After three years of rand weakness, you want to start seeing this trade number close,” said Chris Hart, chief economist at Investment Solutions.
“However, much of South Africa’s most critical export, being platinum, is being constrained by the current strike in the sector with gold production also having fallen off.
“We have a situation where our trade balance is now structural, it is no longer cyclical in terms of the business cycle,” he said.
Nedbank economist Isaac Matshego believes the trade conditions will worsen.
“The larger than expected deficit is the result of the strike in the platinum sector,” said Mr Matshego.
“The category of minerals and precious metals will continue to reflect the travails in the sector as long as the strike continues,” he said.
“Trade conditions are set to become worse until production normalises in the platinum sector. At the same time portfolio inflows need to be kept up to cover the deficit on the current account.”- Business Day.