South Africa Posts 8.6 Billion-Rand Trade Deficit in August

  • Cumulative surplus for year to August is 7.4 billion rand
  • Exports fell as shipments of precious metals, stones down 30%

South Africa’s trade balance swung to a deficit in August after three months of surpluses as shipments of precious metals and stones, which include gold and diamonds slumped.

The 8.6 billion-rand ($619 million) deficit compares with a revised surplus of 5 billion rand in July, the Pretoria-based South African Revenue Service said in an e-mailed statement on Friday. The median of 10 economist estimates compiled by Bloomberg was for a surplus of 1.6 billion rand.

South Africa recorded its first quarterly trade surplus in a year in the three months through June as mining exports surged, helping to narrow the deficit on the current account, the broadest measure of goods and services, to 3.1 percent of gross domestic product from 5.3 percent. The smaller current-account gap would benefit the rand, which has gained 12 percent against the dollar this year after losing 25 percent of its value against the U.S. currency in 2015.

“Even though this month number is not good, the trend in 2016 so far is definitely better than last year, which is supportive of the rand,” Christie Viljoen, an economist at KPMG LLP in Cape Town, said by phone. “It helps keep the current-account deficit lower.”

Cumulative Surplus

The cumulative surplus for the first eight months of 2016 is 7.4 billion rand compared with a shortfall of 35.1 billion in the same period last year.

Exports decreased by 5.5 percent to 90.2 billion rand as the shipments of precious metals and stones fell by 30 percent and vehicles and transport equipment declined by 10 percent. Imports rose by 9.2 percent to 98.8 billion rand as the purchases of mineral products, which include oil, increased by 24 percent.

The rand strengthened 0.7 percent to 13.7920 per dollar as of 3:57 p.m. in Johannesburg. Yields on rand-denominated government bonds due December 2026 fell one basis point to 8.66 percent.

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

— With assistance by Arabile Gumede, and Simbarashe Gumbo

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