- Surplus narrows from record in May as oil imports increase
- Positive trade balance may help ease ease current account gap
South Africa recorded a second consecutive monthly trade surplus in June as exports of vegetable products climbed, while oil imports also rose.
The surplus narrowed to 12.5 billion rand ($880 million) from a revised record 18.4 billion rand in May, the Pretoria-based South African Revenue Service said in an e-mailed statement on Friday. The median of nine economist estimates compiled by Bloomberg was for a surplus of 8.8 billion rand. The cumulative surplus for 2016 is 12.5 billion rand compared with a deficit of 22.95 billion rand in the same period last year.
The rand’s 18 percent drop against the dollar since the start of 2015 has boosted exports, which may help narrow the deficit on the current account that swelled to 5 percent of gross domestic product in the first quarter. Low metal prices and the worst drought in more than a century have weighed on Africa’s most-industrialized economy. GDP contracted 1.2 percent in the first quarter.
“The fact that the trade deficit has narrowed so much is obviously a positive thing for South Africa and perhaps it’s even one of the things supporting rand strength,” Kamilla Kaplan, an economist at Investec Ltd. in Johannesburg, said by phone before the release of the data. “Exports have done well, but if it wasn’t for the weak global growth we would have done even better.”
Exports rose 0.7 percent in June from a month earlier, while imports climbed 7.6 percent, led by a increase in mineral products, which includes oil.
The rand pared losses after the release of the data, and was 0.2 percent weaker at 14.1587 per dollar at 2:13 p.m. in Johannesburg on Friday. Yield on rand-denominated government bonds due December 2026 fell one basis points to 8.73 percent.
Monthly trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.