Picture: ISTOCK
Picture: ISTOCK

SA’s trade balance is set to stay in surplus for the rest of the year, helping to reverse the shortfall since the end of 2017.

Exports will get a boost from favourable global economic growth, helping counter the effect of higher imports due to stronger domestic demand, said Nedbank economist Dennis Dykes. “We still anticipate a trade surplus for 2018 as a whole, albeit smaller than 2017’s,” he said.

SA had a trade surplus of R9.47bn in March compared with R11.81bn in the matching period in 2018, according to South African Revenue Service data.

Exports of metals and vegetables climbed while imports of mineral products declined.

A surplus occurs when the cost of a country’s sales to other nations exceeds the value of what it buys from them.

Trends “evident in this release will likely continue and it should over the coming months boost the trade account”, said NKC economist Gerrit van Rooyen. The strong trade performance in 2017 provided underlying support for the rand while helping to contain the current account deficit, he said.

So far in 2018 SA has recorded a deficit of R18.6bn, compared with a surplus of R4.22bn in the same period in 2017.

The threat of a trade war between the US and China may disrupt the global trade momentum and weaken SA’s surplus, said Dykes.

Stronger domestic demand, driven by moderate inflation, higher confidence levels and monetary policy loosening, may also push imports higher in 2018, analysts said.

Inflation has surprised on the downside in recent months, with the consumer price index falling to its lowest level in seven years in March, strengthening the case for the Reserve Bank to cut interest rates.