SA’s current-account deficit narrowed in line with expectations in the second quarter of 2018 to 3.3% of GDP from 4.6% in the previous quarter.

This is the second consecutive quarter in which a deficit has been posted.

Data released by the South African Reserve Bank on Thursday in Pretoria, showed that the deficit on the current account of the balance of payments narrowed by R55.6bn to R163.8bn in the second quarter compared to R219.4bn in the first quarter.

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

SA’s trade balance switched to a surplus of R41.9bn in the second quarter of 2018 from a deficit of R15.2bn in the first quarter. The improvement in the trade balance from the first quarter was a result of a higher increase in the value of net gold and exports than imports.

The shortfall on the services, income and current transfer account widened to R205.7bn in the second quarter of 2018 from R204.2bn the first quarter, which has been attributed to a widening in the primary income deficit and a larger services deficit.

The Bloomberg Consensus was for a deficit of 3.3%.