Trade deficit widens sharply as imports surge

SA started 2025 on a weaker trade footing, recording a preliminary trade balance deficit of R16.4bn in January, according to data released by the SA Revenue Service (Sars).

The deficit stemmed from exports worth R149bn and imports amounting to R165.4bn, inclusive of trade with neighbouring Botswana, Eswatini, Lesotho and Namibia. This marks a sharp deterioration compared to a deficit of R3.7bn in January 2024, as import growth far outpaced modest gains in exports.

On a year-on-year basis, exports edged up 1.2% from R147.2bn in January 2024, while imports surged 9.6% from R150.9bn in the same period. The month-on-month comparison was less flattering: exports shrank by R10.2bn (-6.4%) in December 2024 and January 2025, while imports increased by R20.9bn (14.4%) over the same period.

“January normally sees a seasonal decline in export activity,” Lara Hodes, Investec economist said.

“Moreover, while global manufacturing conditions overall improved in January, activity remained largely subdued in the eurozone, a key trading partner. Specifically, the HCOB eurozone manufacturing index remained in contractionary territory at the start of 2025.”

The decline in exports was led by lower shipments of gold, vehicles, and platinum group metals (PGMs) — all key components of SA’s export basket.

Meanwhile, the climb in imports was driven by higher imports of original equipment components, aircraft and motor vehicle parts and accessories, according to Sars.

Routine vouchers of correction led Sars to revise December 2024’s trade surplus downwards from R15.5bn to R14.7bn.

Trade with Botswana, Eswatini, Lesotho and Namibia in January showed a preliminary surplus of R10.3bn, supported by exports of R16.1bn and imports of R5.7bn. This was slightly improved from the R9.1bn surplus recorded in January 2024.

However, excluding Botswana, Eswatini, Lesotho and Namibia trade, SA posted a larger preliminary trade deficit of R26.8bn with the rest of the world. This resulted from exports of R132.9bn and imports of R159.7bn.

Compared to December, exports to other markets fell by R10.7bn (-7.5%), while imports rose by R20.4bn (14.7%).

“Globally, uncertainty prevails around the extent of US trade tariffs, escalating fears of a trade war which could have a marked effect on global trade and growth,” Hodes said.

marxj@businesslive.co.za