SA’s current account deficit widened in the first quarter of 2017 to 2.1% of GDP, from 1.7% the previous quarter, but the deficit is still small by recent standards. In 2012-16, SA had one of the largest current account deficits in emerging markets, with the shortfall often exceeding 6% of GDP. The deficit narrowed in 2016 due to an improved trade balance. Reserve Bank economist Iaan Venter said that an unchanged trade surplus, combined with a widened deficit in services, income and current transfer account resulted in the widened deficit. Nedbank economist Isaac Matshego expected the current account deficit to widen slightly in coming quarters as imports improve. “We expect exports to be propped up by improving global demand, but it will remain highly dependent on domestic production improving, while risks to global growth remain on the downside.” Capital Economics economist John Ashbourne said: “SA’s improved external position will help to shield the rand from the effects of conti...
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