SA’s current account deficit widened more than expected in the fourth quarter of 2017 to 2.9% of GDP from 2.1% the previous quarter.

This was far higher than the Bloomberg economists’ consensus of 2%.

But for the year, SA’s current account deficit narrowed to 2.5% in 2017 from 2.8% in 2016.

The deficit came in at R137bn in the fourth quarter from R99bn in the third quarter, the Reserve Bank’s Quarterly Bulletin released on Tuesday in Pretoria showed.

Although SA achieved a trade surplus for the fifth consecutive quarter, it was too small to offset a growing shortfall on its services, income and current transfer account.

SA’s trade surplus narrowed from R92bn in the third quarter to R74bn in the fourth quarter of 2017 based on a faster increase of merchandise imports compared with net gold and merchandise exports. The increase in the value of both imported and exported goods was driven by lower volumes.

The shortfall on the services, income and current transfer account continued to widen by R21bn from 4.1% of GDP in the third quarter to 4.4% of GDP in the fourth quarter.

The current account is indicative of SA’s trade with the rest of the world. Compared with recent years, however, the deficit has narrowed significantly. The current account deficit averaged more than 5% of GDP between 2012 and 2015.

The terms of trade improved in the fourth quarter as the rand price of exports increased at a faster pace than that of imports.

Compared with the same period last year, the deficit widened significantly from 1.7% of GDP.