South Africa Trade Deficit Widens to 14.2 Billion RandRene Vollgraaff
South Africa’s trade gap widened in July to the biggest in three months as machinery and chemical products imports climbed.
The deficit grew to 14.2 billion rand ($1.4 billion), the most since April, from 7.7 billion rand in June, the Pretoria-based South African Revenue Service said in an e-mailed statement today. The median estimate in a Bloomberg survey of 11 economists was for a 9 billion rand shortfall.
South Africa’s trade balance is keeping pressure on the current account, which reached a four-year high last year, and undermines the rand. The current-account deficit narrowed to 5.8 percent of gross domestic product in the first quarter, while the rand has lost 18 percent against the dollar this year, the worst performer among 16 major currencies tracked by Bloomberg.
A weaker currency should make South Africa more competitive and some exporters are already benefiting from this, Finance Minister Pravin Gordhan said in an interview on Aug. 27. The drop in the value of the rand also boosts the cost of imports.
Imports rose 18 percent in July to 89.9 billion rand in the month, led by a 19 percent increase in imported machinery and appliances and 34 percent more shipments of chemical products. Exports climbed 11 percent to 75.7 billion rand, with those of precious and semi-precious stones and metals increasing 22 percent.
The cumulative trade deficit for 2013 rose to 89.4 billion rand from 59 billion for the first seven months of last year.
The monthly trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.