South Africa Q3 Current Account Deficit Widens as Trade Surplus Narrows
The Central Bank of South Africa on Thursday said its current account deficit widened slightly in the third quarter from the second quarter as Africa’s most industrialised economy recorded a narrower quarterly trade surplus.
The poor numbers will dampen the positive momentum in the economy after data on Tuesday showed South Africa emerged from its first recession in almost a decade in the third quarter, giving a boost to President Cyril Ramaphosa who has pledged to re-start growth after a decade of stagnation.
According to the South African Reserve Bank, “South Africa’s current account deficit widened to 3.5 per cent of gross domestic product (GDP) in the third quarter, from 3.4 per cent in the second quarter.”
The deficit was marginally larger than the average forecast by economists surveyed by Reuters, who had expected it at 3.4 per cent of GDP.
The rand extended its losses against the dollar to 13.9500 as of 0907 GMT, 0.72 percent weaker, from 13.9050 before the release of the data.
The quarterly trade balance recorded a surplus of 14 billion rand ($1 billion) from a surplus of 38.3 billion rand in the second quarter.
The bank said “The deterioration in the trade balance came about as the value of merchandise imports increased more than that of net gold and merchandise exports.”
“These higher values reflect increases in both volumes and prices of exported and imported goods.”