Surprise trade surplus lifts SA’s outlook
A surprise trade surplus in August bodes well for SA’s current account. After July’s revised deficit of R5.29bn from R4.65bn, SA saw a surplus of R8.79bn in August, data from the SA Revenue Service (Sars) showed on Friday. This is a stark contrast to the R1.8bn deficit expected by economists polled by Bloomberg. August also typically delivers a large deficit, which has averaged R5.6bn over the past seven years. The numbers are notoriously volatile, but analysts say the trend points to a trade surplus for the year. A trade surplus eases pressure on the rand and SA’s current account. "Hidden behind the major movements there is more evidence of the lagged impact of the weaker rand exchange rate on the trade account, with higher imports ... evident across many smaller sectors," said NKC economist Elize Kruger. The rand has lost 14% against the dollar this year, which has raised the costs of imports.
The balance of trade indicates the difference in value between a country’s imports...