SA’s trade balance swung into a larger-than-expected surplus of R6.84bn in August, according to data from the SA Revenue Service.

This was thanks to a month-on-month increase in exports of R9.46bn or 8.4% from July to August while imports fell by R1.1bn or 1%, the agency said.

The surplus follows July’s revised deficit of R3.72bn and was above expectations of economists polled by Bloomberg.

For the year to date, however, a trade deficit of R850m has been recorded, which remains a deterioration on the same period in 2018, which recorded a R4.67bn surplus.

The trade balance is a measure of the performance of the country’s imports and exports, and forms a key element of the current account in the balance of payments — a measure of SA’s trade with the rest of the world.

Although exports rose in August, in dollar terms SA’s exports remained fairly subdued over the last year, thanks largely to the slowdown in global trade, said Stanlib chief economist Kevin Lings.

This was as a result of continued tensions between the US and China, which has seen global trade weakening since November last year. 

On a trend basis SA’s trade balance remained in a surplus, according to Lings, but the size of the surplus has narrowed.  

Should the performance of the SA economy gain some momentum into 2020, and at the same time the level of global trade protection remain problematic, export growth would most likely struggle to gain traction, while import demand could accelerate,” said Lings.

This could lead to a larger current account deficit and leave the rand vulnerable to volatile capital flows.


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