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South Africa Posts Second Monthly Trade Surplus in December

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Jan. 31 (Bloomberg) -- South Africa posted a trade surplus for a second consecutive month in December as factories shut for the year-end holidays, reducing demand for imports.

The trade surplus swelled to 2.8 billion rand ($247 million) compared with a revised 695 million rand in November, the Pretoria-based South African Revenue Service said in an e-mailed statement today. The median estimate of nine economists surveyed by Bloomberg was for a surplus of 3 billion rand.

The tax office on Nov. 14 last year revised trade data to include exports to and imports from neighboring countries Botswana, Lesotho, Namibia and Swaziland, known as the BLNS countries, which helped to halve the deficit for the first nine months of the year. Excluding trade with those four countries, South Africa would have posted a shortfall of 4.3 billion in December, the revenue service said.

“A trade surplus in December is not unusual, but the inclusion of the BLNS countries in our trade data played a major role,” Merina Willemse, an economist at Efficient Group Ltd. in the capital Pretoria, said by phone. “Given the higher interest rates and very weak rand, the current-account deficit can recover strongly in 2014.”

Worst Performer

For 2013 as a whole, the trade gap more than doubled to 69.9 billion rand from the previous year, adding to pressure on the current account, whose deficit, according to government estimates, widened to 6.5 percent of gross domestic product last year from 6.3 percent.

South Africa relies mainly on foreign investment in stocks and bonds to help finance the shortfall on the current account, inflows that have fluctuated since last year as investors’ risk perception toward emerging markets increased. The rand has plunged 25 percent against the dollar since the start of last year, the worst performer among 16 major currencies tracked by Bloomberg.

The rand fell 0.9 percent to 11.3051 at 3:05 p.m. in Johannesburg.

Exports decreased 10 percent to 77.6 billion rand in December from the previous month, held back by a 21 percent drop in vehicle exports and a 24 percent decline in shipments of precious metals and stones, the revenue service said.

Imports slipped 13 percent to 74.8 billion rand as machinery purchases fell 20 percent and mineral products, which include oil, increased 5.4 percent.

The monthly trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.

To contact the reporter on this story: Rene Vollgraaff in Johannesburg at rvollgraaff@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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