South Africa Posts Surprise Trade Surplus on Car Exports

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South Africa posted a trade surplus of 5 billion rand ($410 million) in May as exports of vehicles surged and machinery imports fell.

The surplus compared with a revised 1.4 billion-rand deficit in April, the Pretoria-based South African Revenue Service said in an e-mailed statement on Tuesday. The median estimate of 14 economists surveyed by Bloomberg was for a deficit of 3.1 billion rand.

An improvement in the trade account last month may help to further narrow the deficit on the current account, the broadest measure of trade in goods and services, and bolster the rand. The current-account gap eased to 4.8 percent of gross domestic product in the three months through March from 5.1 percent in the previous quarter.

“We have not had any big strikes this year and it definitely has an impact on South Africa’s ability to export,” Jana van Deventer, an economist at ETM Analytics in Johannesburg, said by phone on Tuesday. “This is positive in the short term, but South Africa would need positive trade numbers for some time before it will provide permanent support for the rand.”

The rand gained 0.6 percent to 12.1647 per dollar by 3:10 p.m. in Johannesburg, paring its drop this year to 4.9 percent. Yields on government rand bonds due December 2026 fell four basis points to 8.3 percent.

Car Shipments

Exports rose 4.6 percent to 88.9 billion rand, led by a 20 percent surge in shipments of vehicles and transport equipment, the revenue agency said. Machinery imports fell 7.4 percent, reducing overall purchases from abroad by 2.9 percent to 83.9 billion rand.

South Africa exported 33,411 vehicles in May, more than double the amount shipped in the same month last year, the National Association of Automobile Manufacturers of South Africa said on June 1. The industry group estimates exports will increase by about 25 percent this year to a record 330,000.

The International Monetary Fund estimates the current-account deficit will probably narrow to 4.8 percent of GDP this year from 5.4 percent in 2014 as oil prices drop, lowering the nation’s external risk.

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

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